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MUNICIPAL RESEARCH 


To promote the application of scientific principles to government 


No. 

65 

Issued Monthly by the 

Sept., 

1915 

Bureau of Municipal Research 

261 Broadway, New York 

Entered as Second Class Matter July 30, 1913, at the Post Office, at New York, 
N. Y., under the Act of Congress, August 24, 1912. 


— -• ■ • _ -• ; •*ifigSESr 

/ v 

CONTENTS I 

ADMINISTRATION OF THE INDIAN OFFICE 

PAGE 

PREFATORY NOTE. 1 

REPORT TO THE JOINT COMMISSION OF CON- 
GRESS TO INVESTIGATE INDIAN AFFAIRS: 

LETTER OF TRANSMISSION. 4 

HISTORICAL INTRODUCTION. 11 

PART I. CRITICAL APPRAISAL OF PRESENT 

ORGANIZATION AND METHODS. 19 

PART II. DESCRIPTION OF PRESENT ORGAN- 
IZATION, METHODS AND PROCEDURE. 47 

SUPPLEMENT 

PUBLIC OPINION AND NATIONAL ECONOMY: 

By Mr. R. Fulton Cutting . 119 


Subscription, 35-00 per annum. This issue/ 31.00. 


Monograph 






















PUBLICATIONS OF BUREAU OF MUNICIPAL RESEARCH 

BUDGET Postpaid 

Next Steps in Development of a Budget Procedure for the City of New 

York (January, 1915), 142 p... $0.50 

“A State Budget,” Constructive Proposals to be Submitted to the State Con¬ 
stitutional Convention (February, 1915), 53 p.25 

Budget Systems—A discussion before the New York Constitutional Con¬ 
vention (June, 1915), 200 p.... 1.00 

CITY GOVERNMENT 

The New City Government (Bruere), 2nd ed. (1913), 438 p. bound. 1.62 

Organized Democracy: An Introduction to a Study of American Politics 

Cleveland (1913), 479 p. bound. 2.62 

Efficiency in City Government (annals) (1912), 319 p. 1.17 

Powers and Duties of the Officers and Boards of the City of Hoboken (1911), 

66 p.25 

Municipal Reform Through Revision of Business Methods (1910), 58 p. 10 

Digest of Short Ballot Charters (Beard) (1912, rev. to date), 500 p. 5 °° 

Reports 

Organization and Administration, Atlanta (1912), 64 p.10 

Organization and Administration, Milwaukee (1913), 135 p.25 

Organization and Administration, St. Louis (1910), 416 p. bound. 1.65 

Organization and Functions, Rochester (June, 1915), 104 p.20 

EDUCATION 

Outside Co-operation with the Public Schools of Greater New York (1912), 

112 p.20 

School Stories: Illustrated Guide to School Subjects of Interest (1909), 16 p. .05 

Questions Answered by School Reports As They Are (1909), 18 p.05 

Help-Your-Own-School Suggestions (1914), 32 p.10 

Waterbury and St. Paul Help-Your-School Surveys (1913), 32 p.10 

Digest of New York School Inquiry (1913), 85 p.15 

Reports 

Health and Education, Atlanta (1912), 44 p.10 

Health and Education, Syracuse (1912), 12 p.10 


Test Cards 
Classroom Instruction 


10 for ioc.; 50 for 40c.; 100 for 75c. 























/ 


MUNICIPAL RESEARCH 

1 o promo te the application of scientific principles to government 
Issued Monthly by the 


No. 

65 


Sept., 

1915 


Bureau of Municipal Research 
261 Broadway, New York 

Entered as Second Class Matter July 30, 1913, at the Post Office, at New York, 
N. Y., under the Act of Congress, August 24, 1912. 


4~7 7 


V 



Prefatory Note.\ 

Report to the Joint Commission of 
gate Indian Affairs: 

Letter of Transmission 
Historical Introduction 

Part I. Critical Appraisal of Present Organization and 

Methods 

Chapter I. Defects in Organization. 19 

II. Defects in Methods of Doing Business. 26 

III. Defects in Methods of Accounting and Re¬ 
porting. 35 

Part II. Description of Present Organization, Methods and 

Procedure 

Chapter IV. The Organization of the United States In¬ 
dian Service. 47 

V. Preparation of Annual Estimates for Ap¬ 
propriations . 62 

VI. Preparation of Annual Estimates of Rev¬ 
enues and Receipts. 69 

VII. Issuing Authorities to Spend Money. 74 

“ VIII. Requisitions for Funds by Disbursing Of¬ 
ficers . 82 

IX. General' Description of Principal Records of 

Accounts Kept in the Indian Office. ... 86 

X. Methods of Examination and Audit. 100 


SUPPLEMENT 

PUBLIC OPINION AND NATIONAL ECONOMY- 
Address by Mr. R. Fulton Cutting. 


119 


Subscription, $5.00 per annum. This issue, $1.00. 


































- /"?/<£ 


PREFATORY NOTE 


§ 

While this report was printed for the information of members 
of congress, it was not made a part of the report of the Joint 
Commission of Congress at whose request it was prepared, and 
is not available for distribution.* A large number of requests 
have been made by persons interested in Indian administration; 
therefore in this series it has been rearranged so as to bring the 
constructive matter first (introduction), the critical matter second 
(as Part I), and the descriptive matter last (as Part II). 

Part III of the Report Not Published 

In this relation it may be said that the Joint Commission did 
not print Part III, which contained the following appendices to 
the report: 

Appendix i—Analysis of financial provisions of the various statutes 
and treaties governing Indian funds 

Appendix 2 —Detailed outline of the organization of the office of 
Indian affairs as of July 1, 1912 

Appendix 3—Financial statistics and schedules showing analysis of 
cost, by functions, by organization units, and by 
character of expenditure 

Appendix 4—Proposed business and accounting procedure of the 
Indian Service 

Appendix 5—Treasury circulars No. 34, 35 and 36 (1911) governing 
accounting and reporting 

Unpublished Digest of Statutory and Treaty Provisions Govern¬ 
ing Indian Funds 

When in 1913 inquiry was made into the accounting and report¬ 
ing methods of the Indian Office by the President’s Commission 
on Economy and Efficiency, it was found that there was no digest 
of the provisions of statutes and treaties with Indian tribes gov- 

* The Joint Committee was made up as follows: 

Senators Representatives 

Joe T. Robinson, Ark., Chairman John H. Stephens, Texas 

Harry Lane, Oregon Charles D. Carter, Okla. 

Charles E. Townsend, Mich. Charles H. Burke, S. Dak. 

R. B. Keating, Ark., Secretary 


I 


MUNICIPAL RESEARCH 


erning Indian funds and the trust obligations of the government. 
Such a digest was therefore prepared. It was not completed, 
however, until after congress adjourned March 4, 1913. Then, 
instead of being published, it found its way into the pigeon-holes 
in the Interior Department and the Civil Service Commission, 
where the working papers and unpublished reports of the com¬ 
mission were ordered stored. The digest itself would make a 
document of about three hundred pages 

Unpublished Outline of Organization 

By order of the president, the commission, in co-operation with 
various persons assigned to this work, also prepared at great pains 
a complete analysis of the organization of every department, 
office and commission of the federal government as of July 1, 
1912. This presented a complete picture of the government as 
a whole in summary outline; it also presented an accurate pic¬ 
ture of every administrative bureau, office, and of every opera¬ 
tive or field station, and showed in his working relation each of 
the 500,000 officers and employees in the public service. The 
report in typewritten form was one of the working documents 
used in the preparation of the “budget” submitted by President 
Taft to congress in February, 1913. The “budget” was ordered 
printed by congress, but the cost thereof was to be charged against 
the President's appropriation. There was not enough money 
remaining in this appropriation to warrant the printing of the 
report on organization. It, therefore, also found repose in a 
dark closet. Such portion of this report as had to do with the 
Indian Office was submitted as “Appendix 2,” referred to above, 
in the thought that this would be useful information to members 
of congress and should be made available to the public when the 
report on the administration of the Indian office was presented. 
The character of the information contained in “Appendix 2” is 
shown in Chapter IV, the Rosebud agency of South Dakota 
being taken as illustrative of the two hundred other superin¬ 
tendencies. 

No Analysis Showing Cost of What the Government is Doing 

Likewise a report was prepared showing comparative actual 
costs of what the government was doing in 1911 and 1912 and 
estimated cost for 1913 and 1914. A summary of this was 


2 



ADMINISTRATION OF THE INDIAN OFFICE 


printed as a part of a budget report (Senate document No. 1113, 
626. Congress). It was thought desirable to have a more de¬ 
tailed analysis of the work of the Indian Office, up to date, printed 
as a supplement to the report to the Joint Commission to Investi¬ 
gate Indian Affairs. This information, however, was not made 
available. 

Unavailability of Proposed Constructive Measures for Account¬ 
ing and Reporting 

In the report of the Bureau it was said that it seemed unde¬ 
sirable to go to the trouble of working out the details of a new 
procedure, unless there were some indication of policy and an 
expressed wish to have it done with a view to installation. The 
proposals transmitted as “Appendix 4” and the orders of the 
secretary of the treasury (“Appendix 5”) were not readily avail¬ 
able to persons interested in the subject of Indian Administra¬ 
tion; consequently they also were brought to the attention of the 
Joint Commission as parts of this report. 

Too Voluminous to Be Made Part of This Series 

Congress alone could make the necessary provision for the 
publication of these materials; the documents are too voluminous 
to be printed as a part of this series even if official permission 
were granted. It is again suggested, however, that the data 
might be made readily accessible and available to students by 
placing in the manuscript division of the Library of Congress 
one copy of the unpublished reports and working papers of the 
President’s Commission on Economy and Efficiency. This action 
was recommended by the commission, but the only official action 
taken was to order that the materials be placed under lock and 
key in the Civil Service Commission. 

Discussion at Mohonk Conference on Indian Administration 

At the request of the committee in charge of the Mohonk Con¬ 
ference on Indian Affairs, a paper was read by the director of 
the Bureau of Municipal Research, October 20, 1915, on “The 
Government as Administrator of the Indian Estate.” This pre¬ 
sents many of the conclusions and recommendations of the report 
ot the Joint Commission of Congress.* 

* See proceedings of the Mohonk Conference, October, 1915. 


3 




LETTER OF TRANSMISSION 


The Joint Commission to Investigate Indian Affairs, 

Sixty-third Congress of the United States t Washington, D. C. 

Gentlemen : At your request the New York Bureau of Muni¬ 
cipal Research has made an inquiry into the business and account¬ 
ing methods employed in the administration of the Office of 
Indian Affairs. A summary of conclusions will be found in the 
introductory part of this report. While a detailed description 
of present methods and conditions is submitted herewith, it was 
thought undesirable to take the time to work out concretely the 
constructive details unless some action were taken which would 
indicate that these details were desired. 

Need for Special Care in Management 

The need for special care in management of Indian affairs 
lies in the fact that in theory of law the Indian has not the rights 
of a citizen. He has not even the rights of a foreign resident. 
The Indian individually does not have access to the courts; he 
can not individually appeal to the administrative and judicial 
branches of the public service for the enforcement of his rights. 
He himself is considered as a ward of the United States. His 
property and funds are held in trust. Both of these facts place 
the Government in the position of a guardian, charged with 
extraordinary care. The Indian Office is the agency of the Gov¬ 
ernment for administering both the guardianship of the Indian 
and the trusteeship of his properties. 

Conditions Adverse to Good Administration 

The legal status of the Indian and his property is the condition 
which makes it incumbent on the Government to assume the 
obligation of protector. What is of special interest in this in¬ 
quiry is to note the conditions under which the Indian Office has 
been required to conduct its business. In no other relation are 
the agents of the Government under conditions more adverse to 
efficient administration. The influences which make for infidel¬ 
ity to trusteeship, for subversion of properties and funds, for 


4 


ADMINISTRATION OF THE INDIAN OFFICE 


violation of physical and moral welfare have been powerful. The 
opportunities and inducements to peculation are much greater 
than those which have operated with ruinous effect on other 
branches of public service and on the trustees and officers of 
our great private corporations. In many instances the integrity 
of these has been broken down. It is not to be accepted as a 
conclusion, however, that those who have been employed in the 
Indian Service have been below others in ability or integrity 
when things have gone wrong. It has been largely due to the 
conditions under which the service has been required to operate. 

Government Machinery Inadequate 

In the first place the machinery of the Government has not 
been adapted to the purpose of administering a trust. In the 
second place there has been little sympathy or favorable opinion 
to demand that an effective business machine be developed. In 
fact, the public opinion which has dominated the Government has 
been either hostile or passively indulgent of abuse. This is one 
side of the picture. On the other side, behind the sham protec¬ 
tion which operated largely as a blind to publicity, have been at 
all times great weatlh in the form of Indian funds to be sub¬ 
verted ; valuable lands', mines, oil fields, and other natural re¬ 
sources to be despoiled or appropriated to the use of the trader; 
and large profits to be made by those dealing with trustees who 
were animated by motives of gain. This has been the situation 
in which the Indian Service has been for more than a century— 
the Indian during all this time having his rights and properties 
to greater or less extent neglected; the guardian, the Government, 
in many instances, passive to conditions which have contributed 
to his undoing. 

Opportunities Still Present 

And still, due to the increasing value of his remaining estate, 
there is left an inducement to fraud, corruption, and institu¬ 
tional incompetence almost beyond the possibility of compre¬ 
hension. The properties and funds of the Indians to-day are 
estimated at not less than one thousand millions of dollars. There 
is still a great obligation to be discharged, which must run through 
many years. The Government itself owes many millions of 
dollars for Indian moneys which it has converted to its own use, 


5 



MUNICIPAL RESEARCH 


and it is of interest to note that it does not know and the officers 
do not know what is the present condition of the Indian funds 
in their keeping. Every community bordering on Indian lands 
still has in it persons who are using every influence at their com¬ 
mand to obtain official action, to the end that they may get pos¬ 
session of Indian lands. Great corporations maintain lobbyists 
and unprincipled agents with a view of getting concessions, leases, 
and legislation which are favorable to their own selfish purposes, 
but unfavorable to the Indian. 

Primary Defects 

As has been said, a primary defect from the viewpoint of the 
Government and the execution of its trust is one of organiza¬ 
tion. Going along with this have been defective and antiquated 
methods. But what has contributed most to a continuation of 
essential defects has been lack of facilities for making available 
the facts—lack of publicity. But in this the Indian Service does 
not present a new problem. The story of the mismanagement of 
Indian affairs is only a chapter in the history of the mismanage¬ 
ment of corporate trusts. The Indian has been the victim of 
the same kind of neglect, the same abortive processes, the same 
malpractices as have the life insurance policyholders, the bank 
depositor, the industrial and transportation shareholder. The 
form of organization of the trusteeship has been one which does 
not provide for independent audit and supervision. The insti¬ 
tutional methods and practices have been such that they do not 
provide either a fact basis for official judgment or publicity of 
facts which, if made available, would supply evidence of infidelity. 
In the operation of this machinery of Government, therefore, 
there has not been the means provided for effective official 
scrutiny and the public conscience could not be reached. 

Ample Precedents To Be Followed 
Precedents to be followed are ample. In private corporate 
trusts that have been mismanaged a basis of appeal has been 
found only when some favorable circumstance has brought to 
light conditions so shocking as to cause those people who have 
possessed political power, as a matter of self-protection, to de¬ 
mand a thorough reorganization and revision of methods. The 
same motive has lain back of legislation for the Indian. But 


6 



ADMINISTRATION OF THE INDIAN OFFICE 


the motive to political action has been less effective, for the reason 
that in the past the Indians who have acted in self-protection 
have either been killed or placed in confinement. All the ma¬ 
chinery of Government has been set to work to repress rather 
than to provide adequate means for justly dealing with a large 
population which has had no political rights. There was no con¬ 
stituency in the Government or the people to which an appeal to 
self-interest could be made. Changes in organization and methods 
therefore could come only through some means which would regu¬ 
larly make public the facts necessary to an appeal to the con¬ 
science of those who have no personal interest in Indian affairs. 
This means has been wanting. Appeal has been made only when 
conditions have developed which endangered the lives and health 
of millions of Americans threatened by the outlawry or disease 
results of social neglect. 

Constructive Recommendations 

Briefly stated, the constructive recommendations of the report 
are premised on what would seem to be conclusive evidence that 
the funds and properties of the Indian have not been adequately 
protected in the past. The need for change is found in lack of 
adequate means whereby , officers and agents of the Government 
may be held strictly accountable as “trustees” for the funds 
and properties of the Indians, and for the development of the 
highest efficiency on the part of those who perform the function 
of “guardian”—i. e., those who are charged with responsibility 
for the care, education, health, support, and physical welfare and 
comfort of those who are reduced to the status of wards to the 
Government. With the view that further adaptations should be 
made to secure these ends, the following general recommenda¬ 
tions are made: 

1. That there be a systematic reorganization and revision 
of methods. 

2. That in making these changes, units of organization 
be established to exercise the function of “guardianship’' 
or care, education, and physical welfare of the Indian, which 
are separate and distinct from units of organization, which 
are charged with the exercise of functions of “trusteeship.” 

3. That in each group of organization units a clear dis- 


7 



MUNICIPAL RESEARCH 


tinction be made between the “line” as distinguished from 
the “staff.” That is, the “line” organization would be re¬ 
sponsible for doing things and the “staff” organization would 
be responsible for advising the heads of the line with respect 
to planning and the manner in which plans and orders are 
executed by others, the staff to be relieved from issuing and 
executing orders which require direct dealings with the “line,” 
the Indians, or with the business world. 

4. That the whole service be taken out of politics and 
the personnel of both branches of the service be so classified 
and graded with such salary rates as to provide a service¬ 
wide opportunity for promotions based on individual ef¬ 
ficiency, instead of having the opportunity of the individual 
so limited as not to offer him a career. 

5. That methods of appropriations be changed with a 
view to establishing a more effective control over the con¬ 
tracting and purchasing relations, and at the same time 
reducing the cost and eliminating the unnecessary “red tape” 
of administration. 

6. That the allotments be made under conditions at¬ 
tached to appropriations which would locate administra¬ 
tive responsibility for the exercise of foresight in planning 
work to be done as well as review of results, and to this 
end requiring the establishment of accounts and current 
reports which will show cost of work under each allotment. 

7. That methods of inspection be systematized and de¬ 
veloped in such manner that the administration may utilize 
the reports of supervisors and special agents more effectively, 
and to this end to install standardized forms of “score cards” 
wherever practicable, on which reviewable facts may be re¬ 
ported instead of leaving the whole matter to the initiative 
and discretion of each individual. 

8. That provision be made for more economical pur¬ 
chase and distribution of supplies, materials and equipment. 

9. That a complete system of double-entry accounting 
be installed which will insure complete, accurate, and up- 
to-date reports of all facts needed by the administrator by 
Congress, or by citizens in thinking about the business and 
financial relations of the Indian Service. 


8 



ADMINISTRATION OF THE INDIAN OFFICE 


Criticism of Methods, Not of Personnel 

The critical statements which appear in different parts of the 
report relate to methods and procedure rather than to officials 
and employees of the Office of Indian Affairs. The incomplete 
and unsatisfactory accounting system described is largely due to 
a lack of facilities and lack of personnel for the installation and 
operation of an up-to-date accounting system rather than to ne¬ 
glect or deficiencies on the part of officials, clerks, and employees 
in the service. For some time past it has been realized that the 
methods now in use are not adapted to the character or volume 
of work which is being performed. This realization has brought 
about from time to time changes which have been in the nature 
of new patches placed on an old garment—i. e., have resulted in 
adding new features to the old methods in vogue, but not in 
the installation of a system which is flexible and responsive to 
the needs. A thorough reorganization and a thorough revision 
of methods of accounting and reporting should be made a part 
of the further development of the work of the Office of Indian 
Affairs. 

Scope and Method of Survey 

The survey was undertaken with the following purposes in 
view: 

1. To learn the existing, important business and account¬ 
ing problems confronting the administration of the Office 
of Indian Affairs. 

2. To state wherein it is thought present methods are 
defective. 

3. To formulate constructive suggestions with a view of 
providing more up-to-date methods of administration and 
accounting, by which the interests of the Indian would be 
better served. 

4. To discuss the advantages which it is thought would 
be gained from the adoption of the constructive recommen- 

, dations proposed. 

The last two of these purposes have not been carried out in 
detail for the reasons above stated. 

In studying the Office of Indian Affairs the following plan 
was pursued: The organization methods and procedure of the 
Division of Finance and such parts of other divisions and 


9 




MUNICIPAL RESEARCH 


branches of the administration as were involved were studied and 
described. The descriptive report in draft form was submitted 
to heads of the several divisions for correction and discussion— 
all statements of fact contained in the report as now presented 
having been reviewed by responsible officers in so far as they 
relate to their respective divisions. From these statements and 
descriptions of fact our conclusions have been drawn. The con¬ 
clusions themselves are separately stated, so that no difficulty 
would be experienced in distinguishing matters of fact from mat¬ 
ters of opinion. 


Personal Acknowledgment 

The Bureau of Municipal Research is greatly indebted to the 
Commissioner of the Office of Indian Affairs and the heads of 
divisions in Washington for their helpful co-operation in the sur¬ 
vey. Every official and employee interviewed extended to the 
representatives of the bureau the most cordial courtesy, for which 
hearty and appreciative acknowledgment is here made. 

Respectfully submitted. 

F. A. Cleveland, Director 


io 



HISTORICAL INTRODUCTION 


Ours is not the only Government that has had to face serious 
problems occasioned by the fact that peoples of different races, 
speaking different languages, and in different stages of civilization, 
have occupied one national territory and have been subject to a 
common government in which one race in its ability to command 
and enforce was dominant. England in India and in Egypt is 
another illustration in point. But no stranger and more complex 
political status can be found than that of the American Indian 
throughout his relations with the American people. 

Early Attitude of the Whites 

At first a roving, disorganized public enemy, whom it was not 
possible to conquer in a decisive way and to treat with as a con¬ 
quered nation of power, the Indian harassed our westward mov¬ 
ing frontier from the days when it stretched along the Atlantic 
seaboard, only a few miles inland from the coast, until it reached 
beyond the Mississippi River. The hostile resistance of what by 
the Indian was regarded as intrusion, the atrocities that often 
characterized his continuous and petty raids, as well as the few 
organized onslaughts on our frontiersmen, and his futile resistance 
to the white man’s occupancy of the territory over which legal 
sovereignty had been acquired without, in all instances, his full 
knowledge and without an understanding that he had relinquished 
his ancestral inheritance, caused the American people, down to 
the early decades of the nineteenth century, to care little about 
his fate. 

Change in Public Sentiment 

The latter part of the nineteenth century, however, witnessed 
a great change in the national sentiment toward the Indian. 
McMaster, writing in 1884, in the first volume of his History of 
the People of the United States, pictures this transition in popular 
sentiment when he says: 

The opinion which many careful and just-minded persons of our 
time have formed touching the Indians, of whom the settlers in the 
borderland then stood in constant dread, is a singular mixture of truth 
and romance. Time and absence have softened all that is vile and re- 


11 


MUNICIPAL RESEARCH 


pulsive in his character and left in full relief all that is good and 
alluring. We are in no danger of being tomahawked. We are not 
terrified by his warwhoop. An Indian in his paint and feathers is now 
a much rarer show than a Bengal tiger or a white bear from the Polar 
Sea. Of fifty millions of human beings scattered over the land, not 
five millions have ever in their lives looked upon an Indian. We are 
therefore much more disposed to pity than to hate. 

The Absence of an Indian Policy 

From the viewpoint of the Government and its agencies for 
dealing with the Indian, the fact which is most significant is the 
lack of anything worthy of the name of a policy prior to the 
passage by Congress of the Dawes Act in 1887. This act (pro¬ 
viding for the allotment of lands in severalty and granting indi¬ 
vidual citizenship and therefore looking to the breaking up of all 
vestige of tribal relations and the gradual absorption of the Indian 
into the body politic of the Nation) had for its object bringing 
Indian institutional relations into harmony with those of his white 
neighbors. The colonists had, it is true, taken from the Indian 
his land or so much as they needed upon one pretext or another, 
usually under the guise of barter in which the bargaining power 
was very unequal, but then there was still plenty of land left for 
the Indian to roam over without being compelled to change his 
traditional habits of gaining his livelihood. The method was to 
force him to move, and he was required to keep “on the move” 
from the earliest settlement without any purpose of place for his 
ultimate assimilation. Missionary enterprise followed him and 
found him hopeful material for the propagation of the Gospel. 
Cromwell's Parliament in 1649 made provision for disseminating 
religious teaching to the Indians of New England, and Roger 
Williams proclaimed in 1654 the widespread conversion of the 
Indians of New England. The colonists also guaranteed friendly 
Indians certain legal rights, allotments of land in severalty to in¬ 
dividual Indians, annuities, and education advantages which in 
some instances went further than similar experiments a centufy 
or two later. 1 Thus the Jamestown colonists set aside the thousand 
acres of land for an Indian university. The founding of William 
and Mary College (1691) and Harvard College in 1650 included 
in their purposes the education of Indian youth, Dartmouth is 
said to have begun as Moore’s Charity School for Indians. The 

1 See F. A. McKenzie, the Indian in Relation to the White Population. 
1908. 


12 




ADMINISTRATION OF THE INDIAN OFFICE 


British Government prior to the Revolution had two superin¬ 
tendents of Indian affairs appointed by the crown, who determined 
policies and issued orders. The system of annuities began 
under the American Government as the result of a remark¬ 
able treaty made by Gen. Wayne in 1795, but this was considered 
more as a method of keeping the Indians quiet than as a policy of 
improvement. President Jefferson proposed in connection with 
the Louisiana Purchase that all the land west of the Mississippi, 
east of the Rocky Mountains, and north of the thirty-second 
parallel of latitude should be left to the Indians and that they 
should be gradually moved there. Calhoun in a report in 1825 
recommended that the Indians be given a perpetual property right 
in a tract west of the Mississippi, and President Monroe in a 
special message, January 27, 1825, told Congress that the Indians 
ought to be “invited” to remove to the region lying “between the 
present States and Territories, and the Rocky Mountains and 
Mexico.” The Indians were not disposed to move voluntarily 
and the Government was not ready to use compulsion or to define 
the limits of a permanent Indian country, though statesmen and 
politicians played with that idea for a half century, from John 
Quincy Adams’s time to Grant’s administration. 

Development of an Indian Service 

The Secretary of War was made responsible for Indian affairs 
when the War Department was created in 1789 and they remained 
with the War Department until 1849, when the Department of the 
Interior was created and the Indian Service transferred to civil 
control. An Indian bureau had been established in the War De¬ 
partment in 1824. The office of Indian Commissioner was created 
in 1832 and a Department of Indian Affairs organized in 1834, at 
which time the appointees of the service were mostly civilians. 
After 1849 Congress debated for years the expediency of trans¬ 
ferring the Indian .Service back to the War Department and the 
authority of the Government was weakened by a constant fluctua¬ 
tion of responsibility between the two departments, due to the lack 
of a well-defined policy and the difficulties of securing an honest 
and efficient body of public officials to deal with the vast property 
interests of the Indians, the exploiting whites who surrounded 
their reservations, the problems of supporting and educating a 
large number of persons under conditions of life for which they 
were wholly unfitted by heredity, tradition, and training. 

13 




MUNICIPAL RESEARCH 


A recent writer on Indian affairs says of the administration of 
the Office of Indian Affairs : l 

The Indian as an obstacle to the advance of civilization and the de¬ 
velopment of the West was turned over to the Department of War to 
be dealt with summarily and brought to terms. The Indian as a de¬ 
pendent upon the civilization which he was unable effectively to 
obstruct was assigned to the care of the Department of the Interior. 
And the Indian Service of that department, without adequate authority 
to maintain order or even a sufficient force to make its reasonable de¬ 
mands respected, was then confronted with the problem of confining 
its charges within the limits of their respective reservations and of 
instructing them in the rudimentary principles of self-support and 
civilization. 

The Beginning of Responsible Administration 

These unwholesome relations could not continue indefinitely. 
The vast property interests involved in the administration of the 
trusteeship for the Indians’ lands held as common property and for 
the large trust funds whose income or principal was to be spent 
for his support and education led naturally and inevitably, in the 
absence of a definite policy and the creation by Congress of an 
appropriate machinery for the execution of its vacillating com¬ 
mands, to serious maladministration of the trust. When the 
Board of Indian Commissioners was created (1869) many persons 
in Congress believed that three-fourths of all appropriations of 
Indian moneys went to politicians in Washington and less than 
one-fourth reached the Indians. 2 The board is an honorary body 
appointed by the President without reference to the Senate and 
is composed of ten “men eminent for intelligence and philan¬ 
thropy” to correct abuses, and in the language of a former Com¬ 
missioner of Indian Affairs, Francis E. Leupp (see The Indian 
Problem, New York, 1910), 

to serve as a sort of protective medium between the Indian Office and 
outside criticism. To this end it was accustomed to send a committee 
to each warehouse at the season of contract letting, who would ex¬ 
amine the samples offered, pass judgment on the prices bid, and help 
the commissioner to reach satisfactory decisions in cases where he felt 
any uncertainty. From time to time a member of the board would go 
into the Indian field, inspect certain reservations and schools and re¬ 
port on the conditions there. As the contract supply system gradually 
worked out of its vicious rut and was put upon a sound footing with 
proper safeguards, the Board of Indian Commissioners devoted more 

1 See E. M. Rushmore, The Indian Policy, etc., 1914, page 19. 

2 Elsie M. Rushmore, “The Indian Policy During Grant’s Administra¬ 
tion” (1914). 


14 



ADMINISTRATION OF THE INDIAN OFFICE 


of its attention to educational matters and its personnel came to be 
composed in less measure of business men and to include a larger per¬ 
centage of clergymen and scholars. 

The powers of the board are merely advisory, and while it has 
served a useful purpose in creating a wider interest in Indian 
affairs among bodies of more or less formally organized, 
philanthropically disposed private citizens, such as those who have 
met annually for over 30 years in the Lake Mohonk Conferences 
of Friends of the Indian and Other Dependent Peoples, it has 
accomplished little of definite value in the solution of problems of 
Indian administration ; perhaps it has helped to weaken rather 
than develop what is most needed, namely, official responsibility 
and the establishment of a definite administrative policy. 

Early View of Responsibility 

The courts have held consistently that the status of the Indian 
as inherited from the English and Spanish who preceded the 
American Government in its exercise of authority over him is 
that of a state of tutelage. He is a ward of the state, which per¬ 
forms the function of a guardian for his person and property. 
They are persons under legal disability. In ex parte Crow Dog 
(109 U. S., 556) the United States Supreme Court said: 

The Sioux Indians, notwithstanding the pledge contained in their 
agreement that the United States would secure them in self-govern¬ 
ment, were to be subject to the laws of the United States not in the 
sense of citizens, but, as they had always been, as wards subject to a 
guardian; not as individuals, constituted members of the political com¬ 
munity of the United States with a voice in the selection of repre¬ 
sentatives and the framing of laws, but as a dependent community 
who were in a state of pupilage advancing from the condition, of a 
savage tribe to that of a people who through the discipline of labor 
and education it was hoped might become a self-supporting and self- 
governing society. 

Congressional Control Established 

Congress has granted citizenship in “bulk” at different times 
to various tribes; it dealt with questions of status from the be¬ 
ginning until 1867 through its treaty-making power regarding the 
Indians in tribal relation. Suddenly and apparently without any 
full realization that an important change in policy was enacted it 
added to the Indian appropriation bill of 1872 as a rider the 
clause— 

that hereafter no Indian nation or tribe within the territory of the 
United States shall be acknowledged or recognized as an independent 

IS 



MUNICIPAL RESEARCH 


nation, tribe or power with whom the United States may contract by 
treaty. 

This was the result of a stubborn fight betwen the House and 
Senate over the appropriation of money called for to carry out 
treaties ratified by the Senate and concerning which the House 
had not been consulted. Of this the Supreme Court, in United 
States v. Kagaina (118 U. S., 375), said: 

After an experience of a hundred years of the treaty-making system 
of the Government, Congress has determined upon a new departure— 
to govern them by acts of Congress. 

Need for Constructive Programme Squarely Faced 

The undesirability of a continuation of the status of tutelage 
was squarely faced for the first time in the passage of the Dawes 
Act of 1887. This looked to the breaking up of all tribal rela¬ 
tions and provided for the allotment of the Indians’ lands in 
severalty. It also forecast the allotment in severalty of the In¬ 
dians’ funds. It was premised on a broad social philosophy, viz., 
that two races can not occupy the same territory with mutual 
advantage unless they have a common institutional adjustment. 
The institution of property and the institution and laws of social 
control must be equally applicable to both. There must be a com¬ 
mon culture, comrrton ideals, and common rights. 

The permanent annuities had already been largely compounded 
under agreements and treaties into lump sums to be held in trust 
until they could with safety be allotted in severalty or expended 
upon the education of the Indian or the improvement of his lot. 
His weakness in ability to take care of his own interests, to resist 
the temptations of the vices of civilization, especially to resist the 
allurements of the white man’s alcoholic beverages and to support 
himself under the industrial and agricultural economy of the white 
man made the problem of deciding when he ought to be given his 
own property to manage and the rights and duties of citizenship 
necessary to enable him to protect his property a very difficult 
question. 

The Significance of the Dawes Act 
The economic policy established by the Dawes Act was to begin 
with the allotment in severalty of his lands by granting a trust 
patent to individual Indians whenever the President thought the 
time was ripe to carve up a reservation and allot to each member 


16 



ADMINISTRATION OF THE INDIAN OFFICE 


of the resident tribe a certain number of acres, depending upon the 
character of the land. The Government was to hold the land for 
25 years and then give a patent in fee in exchange for the trust 
patent. The trust patent, however, gave the patentee all the 
privileges of citizenship, but did not require of him the full re¬ 
sponsibilities of citizenship. Subsequently this was thought to be 
too great freedom for the Indian’s welfare. 

Modification of Policy by the Burke Act 

The Government, when it had released its special guardianship, 
could no longer protect him in any way different from the way it 
could the white man. The protection given him as a citizen was 
inadequate. He was debauched through liquor traffic and the 
aggressive exploitation of unprincipled white neighbors, so the 
Burke Act (1906) was taken as a step backward. It was a par¬ 
tial return to the older status of tutelage. Under the Burke Act 
citizenship was postponed until the patent in fee was granted, 
and this was made a little easier to secure without recourse to 
special act of Congress at the expiration of the 25-year proba¬ 
tionary period of individual ownership. It is thought that in the 
end the Burke Act will better accomplish the emancipation of the 
Indian which the Dawes Act contemplated, but neither recognized 
the fact that the Indian (except in rare individual cases) does 
not desire citizenship. He thinks of land only in terms of com¬ 
munal ownership; to him a title in fee simple is not a prize worth 
striving for. 

Two-Sided Character of the Problem 

Leaving the historical background of race differences and an¬ 
tagonisms, partly social, partly economic, looking to a future con¬ 
structive policy which would do both social and economic justice, 
this policy must be one that must find expression in two ways: 

1. The social adjustment must he made through educa¬ 
tion—through the working out of new ideals which are in 
harmony with the Anglo-Saxon institutional and social life— 
a life which, whether preferable or not, when considered ab¬ 
stractly, nevertheless is dominant. 

2. The economic adjustment must be made through the 
utilization of a Government trusteeship until the Indian, 


17 





MUNICIPAL RESEARCH 


either individually or acting in some organized corporate 
capacity, is able to cope with his white neighbor. 

Correspondingly, the administration of Indian affairs presents 
a twofold problem. On one side it is educational and protective; 
on the other side it is a matter of business. 

The Care and Education of the Indians 

The administration of the educational side of the problem re¬ 
quires that those charged officially with responsibility for his 
guardianship in some way come to understand Indian psychology. 
Before any plans can be made which look toward constructive 
educational results the officer must consider the Indian as an 
Indian, and not treat him and legislate for him as though he were 
a diluted specimen of the American pioneer white man. Educa¬ 
tional and social progress must begin with a full recognition and 
appraisement of what is the Indian’s mental and social equipment. 
Ways and means may be found for developing in him qualities 
which will make of him a citizen in whom the ownership and con¬ 
trol of his own property may be safely vested. This is a man’s 
work in itself. It requires high specialization; it involves scien¬ 
tific and professional considerations that in themselves make 
necessary the closest application. 

Administration of Property and Funds 

On the other hand, there are great properties and funds to be 
administered. In so far as their use is related to the care and 
education of the Indian they are a part of the human side of the 
problem. In so far, however, as the management of properties 
has to do with the outside world; in so far as it involves the ele¬ 
ment of trusteeship for the thousand million dollars of resources 
which by right belong to the Indians; in so far as management 
has to do with inspection, audit, and review of the acts of cus¬ 
todians and purchasing agents, the business side of the Indian 
problem should be independently considered. 

Business Side Alone Subject of this Report 

It is the business side of the administration of the Office of 
Indian Affairs which is the subject of this report. 


18 




CRITICAL APPRAISAL OF PRESENT ORGANIZATION, 
METHODS AND PROCEDURE 


Pa£t I 
CHAPTER I 
Defects in Organization 

The purpose of this chapter is to place before the Committee 
on Indian Affairs and other officers who may be interested, an 
opinion on or appraisement of the defects in the present organiza¬ 
tion, so far as they relate to the business or trusteeship side of 
the problem. To make clear the scope of this criticism, it is here 
stated that this report does not attempt to deal with the problem 
of personal guardianship except as an incident to the business 
problem of trusteeship for funds and properties. Chapter IV of 
this report contains a general description of the organization of 
the Office of Indian Affairs. A detailed description which goes 
down to each employee or group of employees in their working 
relations is shown as Appendix 2 1 . These are submitted as state¬ 
ments of fact. 

What are conceived to be the defects in organization for pur¬ 
poses of administration of the Indian estate are discussed under 
the following general heads: 

1. Defects due to failure to distinguish functions of 
“guardianship” from functions of “trusteeship.” 

2. Defects due to failure to distinguish functions of the 
“line” from functions of the “staff” in organization for the 
administration of Indian trusts. 

3. Defects due to notion that government exists to pro¬ 
vide jobs for successful partisans. 

Defects due to Failure to Distinguish Functions of Guar¬ 
dianship from Functions of Trusteeship 

In this relation the fact may again be stated that the Govern¬ 
ment acts in a dual capacity, viz.: 

1 This was not printed as part of the report (see Prefatory Note, page 

I). 


19 



MUNICIPAL RESEARCH 


1. As guardian or sponsor for the personal safety, edu¬ 
cation, health, and well-being of the Indian, who has had his 
hunting ground taken away from him and who is regarded 
as a ward, while in'process of adaptation to the ways and 
purposes of what to him is a new civilization. 

2. As trustee—or possessor of funds and properties be¬ 
longing to the Indian or appropriated and held for his benefit 
and which are to be administered with all of the care and 
conservatism of a trust estate. 

The Indian Service is made up of agents of the government 
who have been appointed to perform these two functions. It is 
to considerations of the organization or personal alignment of 
these agents that attention is here given. 

Governing Principle in Organisation 

In establishing a norm or standard for judgment as to whether 
the present organization is adapted to the performance of the two 
functions of ‘‘guardianship” and “trusteeship,” it is urged as a 
first premise that neither of them can be most efficiently performed 
unless there is a clear division of responsibility on functional lines. 

The primary inducement to collusion, fraud and subversion lies 
in the relation of “trusteeship” and not in the relation of “guar¬ 
dianship.” The relation of guardianship, however, suffers when¬ 
ever the trusteeship is impaired. The possession of the Indian 
estate, the power to contract for the Indian, the power to dispose 
of his moneys and properties, on the one hand, and the ever¬ 
present desire of the Indian’s white neighbor to make these moneys 
and properties his own, on the other hand—these are conditions 
that have- operated continuously in the past to impair the Indian 
Service. 

Advantages to be Gained through Separation 

The exercise of the function of guardianship should be placed 
on a plane such as will admit of the development of this branch of 
the service to the highest degree of efficiency. The considerations 
involved in this guardianship are primarily professional matters— 
those of education, health and morality. There is the same reason 
for relieving the professional side of the Indian Service from both 
the details of property control and from the inducement to neglect 
education, health and morality that there is in a hospital or an 


20 




ADMINISTRATION OF THE INDIAN OFFICE 


educational institution. The teacher and the physician should be 
freed from business considerations in order that they may give 
their attention to the human side of the problem. In dealing with 
this phase of the problem the teacher and the physician should 
be unhampered to express the need of the Indians for funds and 
for changes in property relations. If those who are charged with 
the education, health and morality of the Indian are responsible 
only for requisitioning or requesting funds when needed and are 
not responsible for the funding and the proprietary side of the 
problem, they (on account of their interest in the human side) 
will constitute an independent force to prevent the improper use 
of funds and properties. When, however, these two responsi¬ 
bilities are mixed, even though the highest ideals of trusteeship 
may prevail, there is less opportunity and less incentive to develop 
the professional side. 

On the other hand, there is a clear advantage in having the 
agents of “trusteeship” a distinct group. The requisitions of the 
teacher and the physician in their capacity of guardian—as an 
agent of the Government—should be drawn in such form and 
supported in such manner as to convince the disbursing officer and 
the executive, in their capacity as trustee. Since the purpose of dis¬ 
bursement or change in the form of the estimate is for the benefit 
of the ward, the trustee should not be permitted to disburse or to 
alienate property except on approved requisitions or requests of 
the guardian. With these relations established, both the oppor¬ 
tunity to develop a high degree of efficiency will be provided for 
and the inducement to infidelity in trusteeship will be removed. 

Distinction Not Made in Present Organization 

These are distinctions which have not been made or accepted 
as a principle of organization. In fact, there is in the present or¬ 
ganization no clear definition of responsibility along functional 
lines except among the most remote subordinates. For example, 
the Indian superintendent is czar within the territorial jurisdiction 
prescribed for him. He is ex-officio both guardian and trustee. 
In both of these capacities he acts while deciding what is needed 
for the Indian and while disbursing funds. In each of the agen¬ 
cies there are from one to five clerks who devote their attention to 
the business side of the problem, besides teachers, physicians and 
various other persons who are devoting their attention to the 


21 




MUNICIPAL RESEARCH 


Indian as human being. These clerks who are charged with busi¬ 
ness functions have such titles as “clerk,” “financial clerk,” “p ro P 
erty clerk,” etc.; but all of them are subordinates of the super¬ 
intendent or disbursing officer, who also has under him the various 
specialized agents who look after the Indian as ward. It would 
not, therefore, increase the number of the personnel employed, 
it woiild not in any manner increase the pay-roll cost of running 
the business, to have the lines of responsibility which reach to 
these two kinds of problems a matter of separate organization. 

The same observation may be made with respect to the office at 
Washington. Here there is no clear functional distinction along 
lines of “trusteeship” and “guardianship.” In certain administra¬ 
tive divisions there is an approximation to such an organization; 
in others, both functions are thoroughly mixed and confused. The 
point which is here emphasized is that the principle as such has 
not been a controlling one in determining how the various ad¬ 
ministrative divisions of the Indian Office will be organized or 
what will be the manner of alignment in order to make each the 
most effective. On the contrary, most of these divisions have 
simply grown up and have performed such duties or activities as 
may have been acquired or assigned, even carrying with them 
names that are not descriptive of the work that is now being done 
—as in the case of the division of “education” that has under it 
not only education, but also health, law and order, field appoint¬ 
ments, industries, supplies and construction and warehouses. In 
other words, it is at one time the agency for looking after the 
human side of the problem and the central business organization. 1 


Defects Due to Failure to Distinguish Functions of the 
“Line” from Functions of the “Staff” 

In the administration of a trust estate somebody must have 
possession of the funds and properties held in trust ; somebody 
must receive and disburse moneys; somebody must be held ac¬ 
countable for transactions involving the exercise of business dis¬ 
cretion or accountability for the properties which are held and 
which are to be used for the benefit of what is known as the 
cestui que trust. In order that the acts of those responsible for 

1 Since this report was rendered there has been a revision of the educa¬ 
tional division to separate functions of “trusteeship” from those of “guard¬ 
ianship.” See Chart III, page 54. 


22 





ADMINISTRATION OF THE INDIAN OFFICE 


conducting business transactions may be reviewed, for the pur¬ 
pose of determining whether the terms and conditions of the 
trust have been complied with, it is desirable to have their acts 
scrutinized by persons who have no responsibility either for pos¬ 
session of the funds and properties or for the exercise of dis¬ 
cretion in the conduct of the business. That is, persons who 
belong to a “staff” organization should scrutinize the acts and 
accounts of those who in the “line” of duty carry on the busi¬ 
ness. The difference in responsibility of the one who is called 
on to conduct the business and the one who is called on to report 
on his acts is a difference that is of highest administrative im¬ 
portance. As a matter of organization, the “line” or hierarchy 
of personnel who are responsible for executing orders should be 
kept absolutely distinct from the “staff” or group established 
with a view of keeping the executive informed with respect to 
the manner in which these orders have been executed. 

As related to the discharge of the trust activities of the Indian 
Service the disbursing officer, the property clerk, the financial 
clerk, the storekeeper, would be men of the “line,” while the audi¬ 
tor, the inspector, the special agent asked to report on the trans¬ 
action of agents would constitute the “staff.” These are dis¬ 
tinctions which have not been kept in mind in organizing the busi¬ 
ness or trust side of the Indian Office. 

Conditions Adverse to the Development of Individual Efficiency 

Aside from the defects in the general plan and principle of 
organization which have been discussed, attention should also be 
called to the conditions which are adverse to the development of 
individual efficiency in the service. These adverse conditions are 
of two classes: 

1. The political consideration still dominant. 

2. The lack of opportunity given to the personnel for the 

development of a career. 

Political Considerations Still Dominant 

In the past the greatest improvement which has been made in 
the organization and personnel of the Indian Office has been ac¬ 
complished through taking a large part of it “out of politics.” Al¬ 
though the Indian Service is primarily a trusteeship and is one 


23 




MUNICIPAL RESEARCH 


which should have been kept entirely free from the “spoils sys¬ 
tem/’ like many other of the National Government relations whose 
functions are peculiarly sacred, this for decades was one of the 
largest fields for political plunder. During and immediately fol¬ 
lowing the Civil War, the conduct of the office became so scanda¬ 
lous as to call for special action on the part of President Grant 
looking toward a better management and control. It was with 
this primarily in view that he attempted to organize a staff from 
the disinterested representatives of such organizations as the 
Friends’ Society and the leading churches. The Indian Service 
was one of the first to be placed under civil service regulations, 
and at the present time a very large part of it is under the indirect 
control of the President, through the Civil Service Commission, 
instead of being made up of job hunters who receive their appoint¬ 
ments as a reward for partisan activity or for other personal and 
selfish ends. 

The special officers, the stockmen, the forest guards, the finan¬ 
cial clerks, and all employees who are paid out of the funds of the 
Five Tribes are still outside the classified service; and the chief 
executive positions are still the subject of political influence. 
This, without question, should be changed. The entire personnel 
should be chosen and retained for “merit.” There is absolutely 
no sound argument supporting partisan appointments to a service 
which should be highly professional or specialized in character 
and which has for its purpose dealing with questions of guardian¬ 
ship and trusteeship. 

But, aside from these large and broadly human questions there 
is a reason in self-interest which should stimulate the white man 
in his efforts to care for the Indian on the human side. With¬ 
out the exercise of strict guardianship the Indian is a danger to 
the whole white population. While the number of Indians has 
not been large as compared with the total number of white per¬ 
sons within the United States (only about one-third of one per 
cent), it is scattered over twenty-four States, comprising three- 
fifths of the territorial area of the United States. Without strict 
surveillance over the physical well-being and morality of the 300,- 
000 wards of the Government each might be a center of infection 
from which trachoma, tuberculosis, and other contagious and in¬ 
fectious diseases would spread to the 10,000,000 people with whom 
they directly or indirectly come in contact during a year. An 


24 




ADMINISTRATION OF THE INDIAN OFFICE 


organization to discharge the duties of a guardianship of this 
kind should not be compromised by any of the motives which 
dominate partisan control or what is known as “patronage.” 

Lack of Opportunity Given to the Personnel 

Mention has already been made of the fact that the Indian 
Service is divided up into small cross sections or units of organ¬ 
ization that have fixed upon it a personnel that is practically un¬ 
changing, or which changes with very great difficulty, due to the 
fact that inadequate attention has been given to the working out 
of a plan of advances within grades and promotions from grade 
to grade that will give to each employee a similar opportunity. 
This is partly a matter of law, partly a matter of Civil 
Service regulation, partly a matter of administration. If, 
on the other hand, positions in the Indian Service were classified 
in such manner that persons doing similar work or performing 
similar services were given an opportunity that would be service¬ 
wide; if, furthermore, each of these varying services were grouped 
so that the kinds of work might be specialized with respect to the 
grades of experience or efficiency that are required, and promo¬ 
tions be made as compensation for work within each of these 
grades, a graduated salary rate might be established. And if, in 
addition to this, some method were provided which would enable 
those in charge of the service and the Civil Service Commission to 
rate persons on the basis of merit or individual efficiency de¬ 
veloped, the continuing inducement for each man in the service 
would be to become more efficient. The esprit de corps of the ser¬ 
vice would be improved. Men who are now depressed and with¬ 
out hope, having continued for years without promotion, would 
have a new outlook and would feel a new interest in this highlv 
specialized work of the Government. These are factors which 
should be taken into consideration in any plan for the reorganiza¬ 
tion of the Indian Service and for placing it on such a basis as 
would be adapted to discharging the obligations of the Govern¬ 
ment, acting in the capacity of guardian for the health, comfort 
and welfare of the Indian on the one side, and in the capacity of 
trustees for his funds and properties on the other. 


25 




CHAPTER II 


DEFECTS IN METHODS OF DOING BUSINESS 

For the purpose of this report, criticism of the minutiae of busi¬ 
ness does not seem to be called for. There are certain general 
characteristics of method, however, which should be considered. 
Among these are the following: 

(1) Methods of making appropriations. 

(2) Methods of allotment of funds. 

(3) Methods of inspection. 

(4) Methods of purchasing. 

Defects in Methods of Making Appropriations 

The present methods of preparing estimates and submitting 
requisitions for appropriations are described in Chapter VI. The 
appropriations as made are not determined by any uniform 
principle of analysis or control. The major part of the funds 
granted by Congress annually is subdivided or itemized by func¬ 
tions or activities—that is, each amount is appropriated for a kind 
of work to be done, not by any particular Indian agency, but by 
all agencies, as for example: 

For surveys, resurveys, classifications, appraisement and 
allotment of land in severalty, under the provisions 

of the act of February 8, 1897, etc. $250,000 

Or, again: 

For the construction, repair and maintenance of ditches, 
reservoirs and dams, purchase and use of irrigation 
tools and appliances, water rights, ditches, lands neces¬ 


sary for canals, pipe lines, etc. $35,700 

Or, again: 

For support of Indian day and industrial schools and other 
educational purposes not specifically provided for 
herein, etc. $1,420,000 


What may be called the general appropriations for functions 
are left to the administration to allot to each of the several 
agencies. Each of these appropriations is subdivided by the 
board of estimate and apportionment after it has been fixed by 
Congress. 

A part, smaller in amount but greater in number of items, of 


26 





ADMINISTRATION OF THE INDIAN OFFICE 


the annual appropriations, however, is subdivided on geographical 
lines, as, for example: 


Montana: 

Support of Indians of Fort Belknap Agency. $20,000 

Support of Indians of Flathead Agency. 9,000 

Support of Indians of Fort Peck Agency. 35,000 

Milk River irrigation system, Fort Belknap Agency 

(reimbursable) . 15,000 

Irrigation system of Flathead Reservation (reim¬ 
bursable) . 200,000 

Irrigation system, Blackfeet Reservation (reim¬ 
bursable) . 100,000 

Irrigation system, Fort Peck (reimbursable). 100,000 

Fulfilling treaties with Crows. 6,000 

Support of Northern and Arapahoe Indians (fulfill¬ 
ing agreement) . 85,000 

Line riders, North Cheyenne Reservation. 1,500 

Purchase of stock, cattle for Northern Cheyennes (re¬ 
imbursable) . 100,000 

Support of Rocky Boys Band of Chippewas. 10,000 

Civilization, etc., Fort Peck Indians (reimbursable).. 100,000 


Appropriations of this kind do not need to be allotted by the ad¬ 
ministration. They are distributed by Congress itself. And this 
fact brings out one of the defects in method. The purpose of an 
appropriation is to enable the executive and legislative branches of 
the Government to exercise control— 

1. Over the contracting and purchasing relations of gov¬ 
ernmental agents and subordinates, including the purchase of 
personal services, supplies, materials and equipment; the pay¬ 
ment under contract for construction and repairs and other 
services not personal in character. 

2. To exercise control over questions of policy. 

Neither of these purposes is adequately served by the form of 

the Indian money grants. 

With respect to the contracting and purchasing relations, the 
present form of appropriation is not adapted to the exercise of 
legislative control, because it neither requires the keeping of 
accounts, the submission' of analyses or the reports of purchases 
essential to the enforcement of accountability, nor does it limit 
the appropriation by itemization or conditions attached so as to 
prevent the use of funds for employment or purposes not in¬ 
tended by the legislature. In the Sundry Civil Appropriation Bill 
passed August 24, T912, Sec. 6, a proviso was attached in part 
following the recommendation of the President’s Economy Com¬ 
mission as follows: 

“Hereafter there shall be submitted, in the Annual Book of Esti- 


27 















MUNICIPAL RESEARCH 


mates, following every estimate for a general or lump sum appro¬ 
priation which exceeds $250,000 in amount, a statement showing in 
parallel columns: 

“First, the number of persons, if any, employed and the rates of 
compensation to each, and the amounts contemplated to be expended 
for each of any other objects or classes of expenditures specified or 
contemplated in the estimate; and 

“Second, the number of persons, if any, employed and the rates of 
compensation paid each, and the amounts expended for each other 
object or class of expenditures out of the appropriation correspond¬ 
ing to the estimate so submitted during the contemplated fiscal year 
next preceding the period for which the estimate is submitted.” 

Pursuant to this requirement, such details as the following are 
set up in the estimates: 


Employees, 1914. 


Employees, 

1912.. 

No. 

Rates of Pay. 

Total. 

No. 

Rates of Pay. 

Total. 

4 

$1,500 

$6,000 

3 

$1,500 

$4,500 

3 

1,400 

4,200 

3 

1,400 

4,200 

3 

1,300 

3,900 

3 

1,300 

3,900 

10 

1,200 

12,000 

10 

1,200 

12,000 


(Section omitted—only enough of table given to illustrate) 


1 

2 

180 

120 

180 

240 

1 

2 

180 

120 

180 

240 

176 


$129,600 

176 


$126,700 




Object or Class of Expenditures. 

1914. 

1912. 

Regular and irregular employees. 

Traveling expenses. 

$154,600 

5,300 

30,000 

$147,743 

3,973 

23,838 

Provisions. 



(Section omitted) 


Buildings. 

3,000 

28,500 

1,524 

5,559 

Miscellaneous. 

Total. 

$ 380,000 

$ 301,396 



Such is the character of detail submitted in support of the 
estimate for an appropriation item of $380,000 for “support of 
Indians in Arizona and New Mexico.” In itself, it does not lay 
the foundation for the preparation of an act in form adapted to the 


28 





















































ADMINISTRATION OF THE INDIAN OFFICE 


exercise of legislative control over the contracting and purchasing 
relations, since the total amount estimated for personal services 
shown by the list of positions above is $129,600, whereas the sum¬ 
mary analysis by “objects or classes of expenditures” for per¬ 
sonal services, supporting the same item, is $154,600. Only 7 out 
of 117 of the proposed items of appropriation estimated for in 
1914 are so analyzed—the other no items being under $250,000. 
Over $7,000,000 of the estimates for the Indian service were 
without supporting analysis of this kind. 

This in itself might not prevent the exercise of control through 
enforced accountability if a condition were attached to such ap¬ 
propriation making it the duty of the Commissioner to lay before 
Congress each year a complete comparative analysis of personnel 
employed, quantities purchased, and the range, as well as the 
average, of prices paid for each class of article traded in at each 
point of purchase. Neither does this in itself stand in the way of 
establishing classifications and specifications for standard rates 
of pay which would make possible regular advances within grade 
and promotions from grade to grade as a reward for individual 
efficiency; it does not prevent enactment by statute or the attach¬ 
ing of conditions which will require the Civil Service Commis¬ 
sion and the head of the department to adopt rules and procedure 
which will provide for giving to each man an opportunity and 
relieve the service from deadening ossification and the dispiriting 
influence of localism, bureaucracy and red tape. But no such 
conditions have been passed, nor has the initiative been taken by 
the Civil Service Commission, nor by the department to obtain 
supplementary legislation of this kind so far as it is needed. 

Again, Congress passes appropriations in such form that the 
second purpose (the exercise of legislative control over questions 
of policy) is defeated, first, because the items are now classified in 
such manner that the administrator may charge a particular 
voucher to any one of from two to a dozen accounts as may suit; 
second, because it does not establish the conditions or provisions 
controlling allotments with a view to fixing executive responsi¬ 
bility for the exercise of proper discretion. Furthermore, the 
present system of appropriations is such as to make the adminis¬ 
tration unnecessarily expensive, as under the present practice the 
Indian office is required to carry many times more appropriation 


29 




MUNICIPAL RESEARCH 


accounts than are needed for purposes of financial control, and it 
undertakes to do the impossible by attempting to enforce the con¬ 
trol over cost data through appropriation charges. 

Defects in Methods of Allotment 

The methods of allotment are defective in that the laws or con¬ 
ditions attached to appropriations governing allotments have not 
been worked out with a view to exercise of control over the effi¬ 
ciency and economy of conducting an Indian service. Again, 
they are defective in that the allotments are set up arbitrarily in 
the central office after the appropriations have been fixed, with¬ 
out placing the initiative where it belongs, with those responsible 
for the work in the field, using the central “staff” as an inde¬ 
pendent critic. In other words, as shown in the description of the 
allotment system, the initiative is put on the “staff,” which relies 
on “rule-of-thumb” judgment or impressions of persons who are 
not responsible for or in touch with details of the transactions of 
the agencies to determine the allotments and then makes no pro¬ 
vision for using cost data either for purposes of review or read¬ 
justment. The whole process comes to be one of personal equa¬ 
tion or customary practice rather than one of action based on “line” 
judgments with careful “staff” review of requests supported by 
data which may be used as a guide to current judgment. Both the 
principle of control over purchasing relations and of control over 
the efficiency of management would be made more effective in 
case the appropriations ran according to the character of the con¬ 
tracting relations or classes of things to be bought, rather than by 
functions. For example, let us assume that the total appropria¬ 
tion were subdivided into some such items as the following: 


For personal services. $000,000,000 

For purchase of services other than personal. 000,000,000 

For purchase of supplies. 000,000,000 

For purchase of materials. 000,000,000 

For purchase of equipment. 000,000,000 

For construction, etc. 000,000.000 


Assuming that these appropriations were based on estimates 
that were supported bv actuarial data produced through the 
accounts of the various agencies, the amount of the annual need 
for funds would be settled after considering quantities, prices, and 
estimates^ of things required for proposed work to be done. Con¬ 
gress having set up the amount available for personal services, 


30 










ADMINISTRATION OF THE INDIAN OFFICE 


the use of that could be controlled by a list of positions, grades, 
and salary rates authorized for the service which would support 
the total amount of appropriations for personal services and pro¬ 
vide adequately for plan of advances and promotions which would 
give to each employee a service-wide opportunity. 

Then, instead of attempting to decide on the number of clerks 
at $720 who could be employed at the Rosebud Agency, the ques¬ 
tion of the use of the positions, salaries, and grades established, 
and the promotions and demotions, etc., could be left to adminis¬ 
trative determination. 

The purchases of services, other than personal, might be condi¬ 
tioned by general rules governing such matters as transportation 
services, telegraph and telephone service, postal service, etc. The 
amount appropriated for materials, supplies and equipment could 
be conditioned by provisions requiring definite specifications in 
so far as these might be set up by some designated office which 
would be authorized to establish them, etc. The functional use of 
these services and things could then be controlled through allot¬ 
ments and cost accounts that would give both to administrators 
and to Congress a strict account in terms of standards of 
economy and efficiency. This could be done through prescribing 
some such conditions as the following: 

That after the amounts of the annual appropriations shall 
have been made, and not later than July 1 of each year, the 
head of each administrative division shall submit to the 
Commissioner of Indian Affairs a request for allotments 
in accordance with the classification of functions or kinds 
of work to be carried on, set forth in the requests for ap¬ 
propriations, which requests for allotments shall carry with 
them estimates of the number of persons required, their 
positions, service grades, and salary rates, and of the kinds 
of materials, supplies, equipment, and services, other than 
personal, with the estimated amounts required for each, 
which estimates shall be summarized by the board of esti¬ 
mate and apportionment and resubmitted to the Indian Com¬ 
missioner with its recommendations. And the Indian Com¬ 
missioner, subject to the approval of the Secretary of the 
Interior, shall allot such amount of the total appropriation 
as is not reserved for future allotment, setting forth in 


31 



MUNICIPAL RESEARCH 


the order of allotment the amount which may be spent 
for each function, activity, or work process to be car¬ 
ried on (or shall designate what amount of the total amount 
appropriated shall be held in reserve for future allotment), 
which allotments, when approved by the Secretary of the 
Interior, shall constitute an authorization to carry on the 
several functions, activities, and work processes; and no pay¬ 
roll shall be paid, and no voucher shall be approved for pay¬ 
ment, until such allotment shall have been made. 

That accounts shall be kept with each item of appropria¬ 
tion showing the original amount appropriated ; the credits or 
reimbursements during the year; the encumbrances, such as 
contracts and open-market orders entered into payable there¬ 
from ; the unencumbered balance; the pay-rolls or vouchers 
drawn; the balance subject to voucher; the advances from 
the Treasury ; and the balance remaining subject to requisi¬ 
tion. 

That accounts shall be kept with each item of allotment for 
functions, activities, and work processes, showing the cost 
of personal services, the cost of materials, supplies, equip¬ 
ment, services other than personal, and other costs, which 
accounts shall be charged from the time records, deliveries 
from stores, invoices for direct deliveries, and other docu¬ 
ments or registered totals of documents from which exact 
cost of work may be determined. And standard detail ex¬ 
pense and cash accounts shall be installed in each superin¬ 
tendency or office which shall be kept under the control of 
the allotment accounts at the central office. 

That each office in which accounts are kept shall submit a 
report showing the expenses and cost of work monthly, which 
report shall be audited and reconciled with the controlling 
allotment accounts in the central office. 

Defects in Methods of Inspection 

Efficiency in administration depends in no small measure on the 
ability of those at the head of the administrative “line” utilizing 
a “staff ’ for the purpose of independent review and report on the 
acts and results obtained by subordinates. An effective inspec¬ 
tion corps or “staff” must (i) be so organized that it will not be 


32 





ADMINISTRATION OF THE INDIAN OFFICE 


responsible for any of the acts or results reported on; (2) report 
reviewable facts from which conclusions may be drawn. The in¬ 
spection service is lacking in both of these essentials. It is not 
entirely relieved from line responsibility; on the contrary, re- 
s onsibility is at times much confused and an adverse report 
would be self-condemnation. It has not developed any sys¬ 
tematic method of reporting facts and conditions. Unless a spe¬ 
cial report is requested, an inspector or special agent who goes to 
a superintendency reports on such subjects and in such form as 
he may see fit, and these reports are usually in the nature of con¬ 
clusions reached by the inspector rather than evident or review- 
able facts. For example, an inspector may report that a school- 
house is in an insanitary condition. There is no form provided 
on which he is to report the facts and conditions that would lay 
the foundation for judgment as to whether a schoolhouse is sani¬ 
tary or insanitary. Inspection has not been reduced to a for¬ 
mal itemization of the points to be observed. A score card might 
be devised for each subject of report on each reservation. This 
has not been done. Therefore, the central office must rely on the 
judgment of the man in the field and blindly support him. 

Not only does this method stand in the way of the exercise of 
executive discretion and force the management into- a bureau¬ 
cracy, but the benefits of inspection are largely destroyed so far as 
they may be utilized in the development of individual efficiency. 
If instead of reporting that the schoolroom at the He Dog day 
school was in an insanitary condition the report were in the form 
of a score card with collateral explanatory remarks, the report 
would put both the inspector and the inspected to the test of re- 
viewable statements of fact. In case the inspector failed to make 
certain observations required, it would be discovered and he could 
be held responsible. If he made them and did not report accu¬ 
rately, this would be found out. Any error in statement of fact 
would ultimately react on the inspector, for in case it reflected on 
the superintendent he would join issue, while if it were unde¬ 
servingly favorable to him subsequent inspection by another per¬ 
son would develop this fact. The method of inspection is as 
crude as it is unsystematic. Before this branch of the service 
performs its part it must be rebuilt from the bottom up. 1 

1 Since this report was rendered the inspection service has been reorgan¬ 
ized, but its methods have not been materially changed. 


33 




MUNICIPAL RESEARCH 


Defects in Methods of Purchasing 

Without going into the results obtained in making purchases, 
the methods themselves condemn the service. 

In the first place, the contracts are made under conditions 
which stand in the way of getting best results. They are made 
under stress of time limitations and uncertainty as to amounts to 
be appropriated on estimates submitted before the appropriations 
are settled. In the second place, methods of purchase and dis¬ 
tribution are tied up in red tape to such an extent that in many 
instances the cost to the Government is unnecessarily increased. 
In the third place, the methods of custodianship are such that 
there is no way of determining whether things purchased serve 
the use intended. The stores and property accounting is only 
a paper record. 

As against the present methods, with millions of funds due to 
the Indians, it would be only businesslike to make available a 
fund for purchases and stores balances that would not throw pur¬ 
chases into a state of confusion and would enable the Govern¬ 
ment, through its agents, to purchase as economically as any large 
corporation. 

There is no excuse for not developing a procedure both for 
purchases and stores and property accounting that would enable 
the Government to exercise control over custodianship. 1 

Other Subjects of Comment 

There are many other subjects of business method which might 
be made the subject of comment. It does not seem necessary, 
however, at this time to do more than to give, by way of illustra¬ 
tion, evidence of need for far-reaching revision, the details of 
which should be worked out when the constructive side is entered 
upon. 

1 Since this report was rendered the whole subject of purchases has been 
taken up and methods are now being revised. For plan of reorganization 
see Chart III, page 54. 


34 






CHAPTER III 


DEFECTS IN METHODS OF ACCOUNTING AND 
REPORTING 

The Office of Indian Affairs, whose volume of business runs 
to many million dollars each year and whose trusteeship includes 
the custody and control of approximately a thousand million dol¬ 
lars’ worth of property, is equipped with records so inadequate 
as not only to imperil the rights of those for whose benefit these 
funds and properties are held, but to leave the administrator him¬ 
self without protection. An accounting system is maintained 
which is single entry in principle. The accounts are partial and 
inaccurate in many particulars. It is impossible with present 
methods for the officials of the Indian Office to keep in personal 
touch with the many varied transactions and the constantly chang¬ 
ing status of property and funds. 

No Balance Sheet 

One of the primary essentials of a system of accounting records 
is that it will at all times make it possible to know what the per¬ 
sons for whom the accounts are kept own, and what they owe. 
Whatever else is kept or not kept, it should be possible to make a 
statement of assets and liabilities. The books of account main¬ 
tained in the home office do not lend themselves to the prepara¬ 
tion of a balance sheet. There is no way of preparing a state¬ 
ment which will show the financial condition of the various funds. 
There are no records from which can be obtained a true state¬ 
ment of revenues and expenses. There is no record maintained 
from which can be obtained a statement of the property and 
funds with which the Indian Office is charged. 

Some of the liabilities are known, but not all. The books are 
maintained on a basis of cash received and cash disbursed. A 
record of disbursements can not show what amounts should be 
paid. A record of receipts can not show what amounts should 
be collected. There is only one set of books which admits of be¬ 
ing balanced and proved as to accuracy of clerical work. These 
books are the appropriation ledgers. But the appropriation 


35 


MUNICIPAL RESEARCH 


ledgers do not show the true condition of appropriations; they are 
not maintained in such form as to be checked with Treasury 
balances. 

It goes without saying that the accounting system as it is main¬ 
tained to-day in the central office is totally inadequate. The many 
ledgers and records which are maintained are the result of prac¬ 
tices which have been handed down during a long period. Some 
innovations have been made in recent years, but what is needed 
is a systematic overhauling. 

Defects of the General Appropriation Ledgers 

Trial balances are not taken from the subsidiary ledgers; nor 
are the ledgers and registers at present controlled as to their accu¬ 
racy. The appropriation ledgers are in effect a duplicate of ledgers 
maintained in the Treasury Department. The information which 
is recorded in the general appropriation ledger is taken from state¬ 
ments which are supplied from the Treasury Department. No 
other information is added to them by the Indian Office except 
segregation of the Indian moneys, proceeds of labor, and a few 
others where more detail seems desirable. 

The present form of general appropriation ledger is made 
necessary by the present procedure; but, with a modified pro¬ 
cedure, the work of keeping this ledger could easily be saved, as 
the information could be developed on other records without addi¬ 
tional cost. In the present form these records are quite separate 
and apart. They do not balance with any other accounts nor can 
they be proved to or used as a part of a scheme of information 
developed by other ledgers or records maintained in the finance 
division. Because the general appropriation ledger is kept on a 
basis of cash received by and advanced from the Treasury, it does 
not and can not show encumbrances against the several funds. 
It does not show the balance subject to voucher, the unencum¬ 
bered balance, or the ( reserve for contracts and open market 
orders. 

General Apportionment Ledger 

The general apportionment ledger is a record used for the pur¬ 
pose of showing the various appropriations as they are appor¬ 
tioned to the various disbursing officers. Some of the larger ap- 

36 



ADMINISTRATION OF THE INDIAN OFFICE 


propriations are apportioned to as many as 150 different agencies 
and schools—in some instances as high as 15 apportionments are 
made from different appropriations for the same school or agency. 
This ledger in itself is not of much value, except for determining 
the balance of undistributed and unallotted funds remaining in the 
different appropriation accounts. The apportionment ledger is not 
balanced, and its accuracy depends entirely upon the accuracy and 
efficiency of the bookkeeper making the postings. It is not used 
throughout the year except when additional distribution is made 
from the various funds and appropriations still carrying an un¬ 
distributed balance. 

Liability Ledgers 

The term “liability ledgers’’ is a misnomer. The liability 
ledgers do not show outstanding liabilities nor do they show en¬ 
cumbrances against the appropriations. Into the liability ledgers 
are not entered amounts which have either been expended or in¬ 
curred, but “authorities” to expend. By this means it is not pos¬ 
sible to ascertain the amount still available for use in a given 
appropriation, but rather an amount to be assigned to the dif¬ 
ferent disbursing officers for expenditure. 

It is not an uncommon occurrence to have certain expenditures 
authorized from an appropriation which the disbursing officer 
does not use for a considerable length of time, and may not use at 
all; nevertheless, the “liability ledger” will show an encumbrance 
against that appropriation as if there were no funds available. 
"Liability ledgers” as they are maintained to-day do not afford 
an opportunity of showing the disposition of each “authority,” 
because the “authorities” issued are not balanced against “ex¬ 
penditures” and “savings” reported subsequently. The liability 
ledgers and the method of posting into them do not permit of con¬ 
trol, and the accuracy of the posting is entirely dependent upon 
the clerk who makes the posting. 

The “liability ledgers” are never balanced, and it is not at all 
an uncommon occurrence to find that the totals which are carried 
in pencil are incorect. The “liability ledger” is only a memoran¬ 
dum record, and unless modified and placed under control is a 
record which is of little value to an administrator of the Indian 
Office. 


37 



MUNICIPAL RESEARCH 


Cost Ledgers 

The term “cost ledgers” is also a misnomer. The cost ledgers 
do not show the cost of the Office of Indian Affairs, nor do they 
show accurately the cost of any portions of the service. The cost 
ledgers are only a record by which are analyzed the expenditures 
made by the field surveys and some expenditures of the home 
office. 

The analyses which the cost ledgers provide include the expen¬ 
ditures of disbursing officers, but they do not include the expendi¬ 
tures incident to the conduct of the business of the Indian Office 
in Washington.- 

With the exception of a few minor expenditures, all expendi¬ 
tures of the home office are provided and paid from the appro¬ 
priation in the legislative bill. As a result, any summaries pre¬ 
pared under the various appropriations only partly represent the 
cost. 

The cost ledgers, as they are maintained to-day, are records 
which do not show accurately the expenditures made under the 
various appropriations. 

Although a very elaborate classification in the cost ledgers has 
been provided, the classification does not lend itself particularly 
well to the production of summaries which would state how much 
was expended for some of the major functions of the Indian 
Service. 

It is impossible to ascertain, without much labor and effort, the 
cost of health work in the various agencies, schools, etc. Like¬ 
wise it is difficult to ascertain the cost of irrigation, of agricul¬ 
ture, of forestry, because there is no definite classification by 
functions. Expenditures which clearly should be charged to one 
function are frequently charged to appropriations and accounts 
of a wholly different character, because the descriptions of appro¬ 
priations are so broadly phrased as sometimes to seem all in¬ 
clusive. 

Because the classification of the cost ledgers is not along func¬ 
tional lines, it is possible to ascertain the cost of certain functions 
only after a long and tedious analysis. The fact that certain ex¬ 
penditures can be recorded in the cost ledgers under a number of 
appropriations the designation of which rests entirely with the 
examiners of the accounts section, prevents a possibility of estab- 



ADMINISTRATION OF THE INDIAN OFFICE 


lishing comparative data which would produce figures the growth 
or diminution of which would indicate a change requiring ad¬ 
ministrative attention. 

The cost ledgers are posted from “quarterly accounts” of dis¬ 
bursing officers and “claims” which reach the cost clerk from the 
claims section. In entering quarterly accounts of disbursing offi¬ 
cers, the expenditures are charged against the appropriation ac¬ 
counts indicated by the disbursing officer. The accounts section 
examines the quarterly accounts, and in the course of its examina¬ 
tion may find that the disbursing office has charged certain 
amounts against appropriations which are not applicable. The 
examiner of the the accounts section notes on the abstract of dis¬ 
bursement the change or transfer to be made. This change is 
only a memorandum change, and does not become effective until 
the Auditor’s office of the Treasury Department passes upon it 
for examination. Therefore, it is quite frequently the case that 
the accounts section suggests changes and transfers, or disallows 
or allows items which subsequently are approved or disapproved 
by the Auditor’s office. 

The cost ledger clerk makes postings in his cost ledgers from 
the memorandum statements, which are corrected by the accounts 
section, and many statements are subsequently changed in the 
Auditor’s office. The Auditor’s office does not report to the cost 
clerk or to the Office of Indian Affairs the allowances or disal¬ 
lowances made by it, and, therefore, the cost ledgers are incorrect, 
because they do no take into account transfers from one account 
to another, or allowances or disallowances made by the Auditor’s 
office. 

Postings are also made in the cost ledgers from claims, and 
much care is given to the verification and accuracy of these post¬ 
ings by checking up any one or two accounts. It becomes very 
difficult to establish this check if the cost ledgers with regard to 
these accounts are not correct and accurate. When, at the end of 
the fiscal year, statements are prepared for congressional use, it is 
self-evident that figures which compose these statements are in- 
corect to the extent to which the cost ledgers are incorrect. 

An additional fact enters into the preparation of these summary 
statements. The fiscal year ends June 30, and the summary 
statements have to be completed by October, which leaves a very 
short time for entering up the expenditures under the last quar- 


39 



MUNICIPAL RESEARCH 


terly accounts of disbursing officers. Because of this fact, dis¬ 
bursing officers frequently do not report in their last quarterly 
accounts all expenditures which should have been considered in 
that quarter, but carry them over to the next year’s appropria¬ 
tion. This results in inaccuracy and a lack of control over dis¬ 
bursing officers. 

Still another factor enters into the method of posting the cost 
ledgers. The cost ledgers are so columnarized as to provide head¬ 
ings which do not lend themselves to a definite classification. It 
frequently occurs that an expenditure can be recorded equally well 
under two or more headings provided in the cost ledgers, and 
it therefore depends largely upon the judgment of the cost clerk 
to determine under which column the entry shall be made. He 
may enter the same kind of an expenditure under two different 
columns provided he does not definitely recall where the previous 
expenditure has been recorded. This condition likewise prevents 
a proper comparison with preceding years. 

“Authorities” 

The present method of issuing authorities, which grant to the 
disbursing officers and others of the Indian Service the right to 
expend money for purposes for which request has been made, is 
entirely inadequate and faulty. There is no definite procedure 
established by which it can be ascertained what appropriation or 
fund must be encumbered with the authorities when making cer¬ 
tain purchases. 

It happens frequently that two authorities are requested for 
identically the same items of expenditure at different times of 
the year or by different agents, and (because of the present inad¬ 
equate method of issuing authorities) the two authorities will be 
charged against different appropriation accounts. The two or 
more appropriations which are applicable under the present 
method of designation of funds may be used entirely as seems 
best in the judgment of either the bookkeeper, the clerk in charge 
of authorities, or the chief of the Finance Division, the latter ex¬ 
ercising final judgment where a designation of the appropriation 
seems incorrect. 

Aside from the fact that such a designation of funds from 
which expenditufe shall be made is entirely unbusinesslike and 
unsatisfactory, a much more vital defect can be found in the fact 


40 



ADMINISTRATION uF THE INDIAN OFFICE 


that in designating the fund from which expenditures are to be 
made, schedules of the estimates of needs for the fiscal year are 
not consulted. The disbursing officer prepares his schedules of 
estimates of needs and includes a given expenditure in an appro¬ 
priation which he designates in such estimates. When authori¬ 
ties are issued it is often a matter of judgment of the disbursing 
officer as to what appropriation is to be charged. 

When the allotment of funds is made at the time each dis¬ 
bursing officer is allotted a certain amount from the lump-sum 
appropriation, it is not specifically designated to what extent these 
estimates of needs have been modified and which of the many ex¬ 
penditures contemplated have either been considered as unneces¬ 
sary, or, if considered necessary, to which appropriation fund they 
have been transferred. It, therefore, occurs that the disbursing 
officer may make request for an authority from the appropriation 
under which he originally contemplated making the expenditure. 
When the authority is passed to the clerk after designation of 
fund, he may choose one of the many appropriations which are 
applicable. The authorities are registered in the liability ledger 
under the appropriation account before they have been approved 
by the acting commissioner. 

It occurs, although not frequently, that an authority in the 
course of approval is canceled or disallowed, and no notice is 
given the Division of Finance of its cancellation. As a result, 
there remains an encumbrance against the appropriation with re¬ 
gard to this specific authority, whereas in reality no such authority 
is outstanding. This has a two-fold effect. It prevents the In¬ 
dian Office from charging other authorities which are applicable 
under this appropriation to this allotment, and it leaves the 
amount of money idle when it could be used for othef purposes. 

Authorities are not liquidated in the liability ledgers. They 
stand as an encumbrance against the specific appropriation on the 
liability ledgers. The reports, both “quarterly accounts” and 
“savings,” are not entered in the liability ledgers in cancellation 
of an authority. As a result the status of the different authori¬ 
ties can not be ascertained with regard to the amount expended 
from an authority, or the amount which still remains unexpended 
in the hands of a disbursing officer. 


41 



MUNICIPAL RESEARCH 


Requisition for Funds 

Under the regulations of the Office of Indian Affairs, the requi¬ 
sition clerk is permitted to send out amounts on requisition from 
a disbursing officer not in excess of his bond and not in excess of 
the amount of authorities previously granted. The clerk has to 
guide himself entirely by records of the Finance Division. 

Because of the present method of bookkeeping, the liability 
ledgers are not accurate and frequently do not state the facts. 

It has occurred that authorities requested, although subse¬ 
quently canceled or not approved, have been entered upon the 
liability ledgers as encumbrances against the appropriation, and 
the requisition clerk, assuming that the registration in the liability 
ledger is that of authorities granted, has issued funds against 
these registered authorities. It is true that the disbursing officer, 
according to present regulations, could not use this sum advanced 
to him on requisition until he obtained an authority, but the fact 
remains that the system permits issuing funds upon requisition 
without proper authority being granted. 

No Control Over Property Accounts 

Through “property return” the Office of Indian Affairs is given 
notice that disbursing officers have received and are accounting 
for supplies and articles. The property returns as prepared to¬ 
day are not well adapted to a proper and adequate check. The 
amount of property remaining on hand at the close of one quar¬ 
ter is not checked with the property returns for the next succeed¬ 
ing quarter. A check of one return with another, is only made 
when it is a return under a bond or a fiscal return of the dis¬ 
bursing officer. This, however, is done only because it is re¬ 
quired that the final return of a disbursing officer must have 
attached to it the receipt of the disbursing officer’s successor. 

At no time, not even at the time when one disbursing agent is 
replaced by another, is there an inventory taken under the super¬ 
vision of the Indian Office. Occasionally this is done by one or 
both men interested, but not officially. There is no way provided 
by which the Indian Office can determine that the incoming dis¬ 
bursing officer has actually received all that he has signed for 
and that the outgoing official has actually turned over all the prop¬ 
erty to his successor. 

It would be an almost impossible task to verify the statements 


42 



ADMINISTRATION OF THE INDIAN OFFICE 


which accompany the final property return after a few weeks had 
elapsed. That this fact has been known to the administrators of 
the Office of Indian Affairs can be seen from the following para¬ 
graph, which is an abstract from a letter written over the name 
of R. G. Valentine, Commissioner of Indian Affairs: 

* * * Having long realized that the present property 

accounts are almost worthless from an administrative point 
of view, and that consequently spending much time on them 
is wasted, and whereas we have already begun to install a 
system of accounts that will mean something, I make this 
order * * *. 

Although this order states that a new installation of a system 
of accounts was begun, little or no progress has been made in 
this line since 1911, and for all practical purposes the property 
accounts and the system used now are nearly the same. 

Quarterly Accounts 

The accounting section of the Finance Division and the office 
of the Auditor for the Interior Department perform to a large 
extent the same kind of an examination. This produces a dupli¬ 
cation of work on many points. It requires a double force, and 
such force has to pass over the various items in rather a super¬ 
ficial manner, because of the volume of work involved in the ex¬ 
amination. The account section checks carefully these accounts. 

The quality of this audit and checking largely depends upon the 
quantity of work on hand, and when the volume is so great that 
the clerks become overburdened the account section is forced to 
make a rather hurried examination of these accounts. The ex¬ 
aminers have no right to allow or disallow any items or amounts 
stated in the reports. The examiners have the right only to ques¬ 
tion the propriety or impropriety of certain charges. They are 
not permitted to suspend, disallow, change, transfer, or make any 
alteration on the original quarterly return. If there are any 
items that seem to be incorrect, the account section may criticise 
by making notes and preparing a letter of advice to the disbursing 
agent to this effect. 

It is left entirely to the Auditor to determine whether the ques¬ 
tions raised are just. The auditors may agree with the opinion 


43 




MUNICIPAL RESEARCH 


of the account section and they may totally ignore the sugges¬ 
tions made. 

With the exception of possibly such additional records and in¬ 
formation as the personal record of employees and their salaries, 
and some other minor records which the Indian Office possesses 
and which the Auditor’s office does not have, the original records 
are used for auditing purposes in the above places. Therefore, it 
would seem to be true that much of the work is being duplicated. 
There is duplication of work on nearly every item of every state¬ 
ment, with the exception of items relating to individual Indian 
money accounts. 

There is at present not sufficient authority vested in the exam¬ 
iners of quarterly accounts of the Finance Division, and there is 
a marked lack of co-operation between the Auditor’s office and 
the Finance Division. The latter particularly shows itself in the 
fact that frequently the Auditor’s office adjusts quarterly accounts 
and does not report these changes to the Finance Division. This 
in itself has an effect on the cost ledgers, the liability ledgers and 
the records which are maintained in the office for keeping a 
distinct check upon authorities granted and moneys expended 
therefrom. 

Lack of Uniformity 

There is no prescribed accounting method which the disbursing 
officers are required to follow. Generally speaking, each dis¬ 
bursing officer may maintain any books of account he may choose. 

Certain books of account have been presented by the Comp¬ 
troller, which each disbursing officer must keep. However, the 
procedure in keeping these books of account is not definitely regu¬ 
lated. Although the book of rules, published in 1904 and still in 
use, provides that all property and cash shall be accounted for by 
disbursing agents, it does not prescribe the method by which such 
accounting shall be made. 

One or two agencies have attempted a double-entry system. 
With the exception of these, the accounting methods employed at 
the various reservations are single entry. There has been made 
an attempt at uniformity in account keeping by having super¬ 
visors visit the different reservations and make suggestions. A 
certain degree of uniformity has also resulted from the require¬ 
ments laid on disbursing officers with respect to their quarterly 


44 



ADMINISTRATION OF THE INDIAN OFFICE 


and annual reports. The form of report is prescribed, but the 
means for filling out the report is largely left to the agents. They 
are only bound to maintain records which will provide for them 
the financial data and statistics. 

Pay-Rolls 

Pay-rolls are prepared in such a manner that they do not lend 
themselves to a ready audit. Under the present method of re¬ 
porting the services of Indians and others on the reservations it 
is impossible to check the accuracy of the charges as stated on the 
pay-roll. There is nothing to prevent the disbursing officer from 
employing labor, men and teams for any work which he may 
deem advisable and charging their time to appropriations which 
are not applicable. He may employ laborers on any work at will 
and charge their services to any appropriation in which he has the 
largest balance. There is nothing in the pay-roll or in any other 
reports of the disbursing officer, or of any other employee of the 
Office of Indian Affairs or Auditor’s office, to show that the per¬ 
sons employed actually perform services. 

The auditors carefully check the figures as stated on the pay¬ 
rolls, but really perform only an arithmetical service. They are 
not able to check and audit the expenditure of this money in any 
way which will assure them that a proper expenditure has been 
made. 

Pay-rolls are not unique in this particular respect. Nearly all 
documents, reports, pay-rolls, etc., are returned to the Office of 
Indian Affairs with a certificate of a disbursing officer. The dis¬ 
bursing officer’s certificate is the only certificate which appears, 
although occasionally other employees of the Indian Service at 
the reservations provide certificates with regard to expenditure 
and receipt of money. 

Lack of Control Over Disbursing Officer 

Under the present method there is little or no control by the 
central office over the disbursing officer. Because each disbursing 
officer is given the power to exercise judgment as to which of the 
many funds at his disposition he shall use, he obtains authorities 
of sufficiently broad designation to make it possible to expend 
money from any one of several, and no means is provided by 


45 



MUNICIPAL RESEARCH 


which either the Office of Indian Affairs or the Auditor’s office 
may determine the propriety of the expenditure. There is no 
proper method provided for ascertaining the amount of money 
received and disbursed by disbursing officers. Only by careful 
checking of such accounts as show discrepancies does it ever 
come to a balancing of entries made against the appropriation or 
account in question. There is no control over the disbursing 
officer for the properties which are in his possession. There is no 
means provided by which he is accountable to the central office 
for the properties which he has received and which he has dis¬ 
bursed. In fact, there is no way other than by a physical examina¬ 
tion of the property, the taking of an inventory, and by a most 
detailed and tedious check that the status of the property on hand 
and what should be on hand could be ascertained. There is an 
absolute lack of co-ordination between the various agencies. Each 
agency employs such methods as seem advisable and desirable to 
the disbursing officer. 

Budget Estimates 

The disbursing officers, in preparing their budget estimates, in 
the main prepare them on arbitrary estimates of their future 
needs. Disbursing offices, anticipating a cut to be made in the 
central office, overestimate their needs and overemphasize in their 
“justifications” the importance of certain items. They have no 
means at their command, except such memoranda and such 
records as they may keep for their own personal use and guid¬ 
ance, from which they can determine with any degree of accuracy 
what their needs will be a year hence. This is because they do 
not maintain records of work performed in a manner which lend 
themselves to comparison. Although they provide statistical in¬ 
formation, this statistical information is not of such a nature as to 
^aid in preparation of the estimates. 


46 



Part II 


DESCRIPTION OF PRESENT ORGANIZATION, 
METHODS AND PROCEDURE 

CHAPTER IV 

Organization of the United States Indian Service 

As has been indicated in the introductory part of this report, 
the Government has undertaken to perform the functions both of 
guardian over the persons and trusteeship over the property of 
the Indians. For dealing with the Indians in the capacity of per¬ 
sonal guardian the Government has provided itself with an or¬ 
ganization which is generally known as the “Indian Office.” The 
general outline of the organization of the Indian Office is shown 
by Chart I. This shows that the Indian Office is a part of the 
Department of the Interior. It, however, is so independent in all 
of its activities that it stands in much the same relation as a sepa¬ 
rate department. The details of organization are contained in 
“Appendix 2” of this report.* 

The President 

The President stands in a peculiar relation to the Indian Ser¬ 
vice in that he has provided himself with an independent agency 
for keeping in touch with Indian affairs. This agency is known 
as the “Board of Indian Commissioners.” Their functions are 
advisory and supervisory. They are appointed by and report 
directly to the President. 

The Secretary of the Interior 

Under the Secretary of the Interior the head of the Indian 
Office is known as the “Commissioner of Indian Affairs.” Due 
to the uniqueness of the Indian problem, however, and the almost 
unrelated character of its work, the Secretary has provided him- 


See Prefatory Note. 


47 



MUNICIPAL RESEARCH 


CHART I SHOWING GENERAL OUTLINE OF ORGANIZATION 
OF THE UNITED STATES INDIAN SERVICE 



self with two independent agencies for keeping in touch with this 
work, viz.: 

1. A group of inspectors who are attached directly to the 
office of the Secretary. 

2. A commissioner of the Five Civilized Tribes. 

Office of Commissioner of Indian Affairs 
The Commissioner of Indian Affairs has under him an assist¬ 
ant commissioner and a chief clerk who is known as second assist¬ 
ant commissioner. The assistant commissioner acts in the ca¬ 
pacity of vice-commissioner; that is, he may act for the commis¬ 
sioner in his absence or to such extent as he may be deputized. 
He is not, however, strictly speaking, in the direct line of adminis¬ 
tration, as all of the processes run direct to the commissioner 


48 























































ADMINISTRATION OF THE INDIAN OFFICE 


himself. The second assistant commissioner or chief clerk has 
directly under him the library of the Indian Office, the steno¬ 
graphic section, and the Mail and Files Division. The Commis¬ 
sioner of Indian Affairs also has a private secretary who performs 
service of a special and confidential character, etc. In addition to 
this, there is a law office which is organized for advising the com¬ 
missioner and his assistants with respect to matters referred to 
it, and to participate in the general routine of administration, so 
far as may be thought desirable. The office also has a section 
known as the “heirship” section; that is, it undertakes to obtain 
information with respect to the heirs of persons who in tribal re¬ 
lation have property rights to be investigated or protected. There 
are also a number of boards to advise the commissioner in mat¬ 
ters of administration, one of which—a board of review—is a 
permanently detached organization. A number of other boards 
are made up of persons ex-officio who occupy other positions in 
the service, as, for example, the board of “estimate and appor¬ 
tionment.” 

Administrative Diznsions of Indian Office 

The central office administration of the field service is con¬ 
ducted through three administrative divisions and two inde¬ 
pendent sections, as follows: 

Education Division. 

Land Division. 

Finance Division. 

Forestry Section. 

Irrigation Section. 

The various sections or branches of work conducted by each 
of these administrative units are shown on Chart II. 

Education Division 

The title “Education Division” is really a misnomer. The work 
of the Division of Education is to pass administratively on prac¬ 
tically all questions not passed on by the other three, as follows: 

i. The law and order section has the direction of the 
work having to do with the suppression of the liquor traffic, 
marriage, divorce, Indian dances, questions involving mat¬ 
ters of morality and discipline, minor charges against em- 


49 




MUNICIPAL RESEARCH 



ployees, and general administrative subjects not coming with¬ 
in the province of the other sections. 

2. The school section has to do with the management and 
teaching in schools both on and off of the reservations—day 
schools and mission and contract schools. 


50 

















































































































ADMINISTRATION OF THE INDIAN OFFICE 


3. The health section handles work conducted by eye 
specialists, dentists, and physicians throughout the whole 
Indian Service. 

4. 1 he industries section handles work that has to do with 
the industrial development of the properties of the Indian, 
farming, vocational training of adults, the control over the 
Indian’s individual rights—that is, the individual Indian 
moneys—apportionment of shares of tribal funds, the con¬ 
struction of buildings for industrial purposes, matters having 
to do with trades, etc. 

5. The supplies section has to do with the purchasing of 
supplies by contract and open-market order, as well as ma¬ 
terials for construction and the supervision of warehouses 
and transportation of passengers and freight. 

6. The appointments section in this division handles all 
matters affecting the classified personnel of the field. 

Land Division 

The Land Division has sent to it all questions requiring ad¬ 
ministrative action that come to the commissioner or require ac¬ 
tion by him pertaining to the lands of the Indians. This division 
has in it four sections, each of which is charged with duties as 
follows: 

1. The contract section is charged with the duties having 
to do with the leasing of Indian lands for agricultural and 
other purposes. 

2. Record section has to do with maintaining records of 
titles of Indian lands, exclusive of the Five Civilized Tribes. 

3. The sales section is charged with the duty of looking 
after sales, mortgages, patents in fee, and other conveyances 
relating to Indian land, exclusive of the Five Civilized 
Tribes. 

4. The allotment section is charged with the administra¬ 
tion and the making of allotments of Indian lands, exclusive 
of the Five Civilized Tribes. 

5. The Five Civilized Tribes section is charged with all 
land matters of these tribes, except leases. 

Finance Division 

The Finance Division has the administrative examination of the 

5i 




MUNICIPAL RESEARCH 


accounts of disbursing agents, the keeping of funds, the examina¬ 
tion of claims to be paid by the Treasury Department, etc. This 
division has in it three sections, one of which handles the accounts 
current; another, the claims which are settled direct; and the 
third is charged with keeping the books and other financial records. 
It is in this particular section that financial reports are compiled. 

Forestry Section 

The forestry section constitutes practically an independent 
division. The administrative work of this section is similar to 
that of the Education and Land Divisions so far as the direction 
of agency affairs in general is concerned; but there are duties of 
a specialized character in relation to the care and use of the tim¬ 
ber resources of the Indians. Many of the problems which arise 
in the management of the Indian timber lands are of a technical 
nature and the work of the section involves a consideration of the 
scientific aspects of forestry, in addition to the purely routine 
phases of office administration. This section not only passes 
upon all questions as to the protection, utilization, and reproduc¬ 
tion of forest crops as presented from the various superinten¬ 
dencies, but also directs exclusively the inspection and administra¬ 
tion in the field by a force of men specially trained in forestry 
theory and practice. 

Irrigation Section 

A separate section has been established in the Indian Office at 
Washington to keep in touch with the field-irrigation service. 
While this is separately conducted, it has not been given the 
official status of an administrative division. 

Centralized Inspection Divisions 

In the Indian Office a distinction is made between what may be 
called the “line” organization and the “staff” organization. That 
which has just been described is in the nature of a “line” organi¬ 
zation ; it represents a line of administrative authority and re¬ 
sponsibility for the work which is done in the field. Alongside of 
this is another organization which, in part at least, is not re¬ 
sponsible for work done, but which is responsible for reporting 
on the conditions found and the acts performed by those who are 
in the “line” organization. This organization has several distinct 


52 



ADMINISTRATION OF THE INDIAN OFFICE 


parts. Directly under the Secretary of the Interior is a staff of 
inspectors who are relieved entirely from the routine work of ad¬ 
ministration and made free to keep in touch with what is going 
on in any part of the Indian Service that may be suggested. 
Under the Commissioner of Indian Affairs there are four 
branches or organizations independent of one another; namely, 
schools and reservations, forestry, irrigation, and liquor traffic. 

The schools and reservations are under officers known as super¬ 
visor of Indian schools, supervisor of industries, medical super¬ 
visor, supervisor of construction, and special agents who make 
special investigations. 

Forestry is under officers known as supervisor of forests and 
deputy supervisor of forests. 

Irrigation is under officers known as chief inspector of irriga¬ 
tion, assistant inspector of irrigation, and superintendent of irri¬ 
gation. 

Liquor traffic is under officers known as chief special officer, 
assistant chief special officer, special officer, and deputy special 
officer. The work of this service is of a special nature and is 
charged with the duty of protecting and apprehending those 
guilty of violating both the Federal and State laws with reference 
to the sale of liquor to Indians and its introduction into what is 
termed the “Indian country.” 1 


The Field Organization 

All of the organization which has so far been described F in 
the nature of an overhead supervisory and inspection service. 
The real work for which the Indian office exists is performed in 
the field—that is, on the reservation, in the schools, and other 
places where the Indians live and have their properties. The 
field organization is made up of three services, namely, Superin¬ 
tendencies, the field irrigation service, and the field allotment 
service. 


1 The field supervisory force has been reorganized since this report was 
rendered, so that now it has three branches : (i) Inspectors; (2) special 

agents; (3) supervisors. The higher salaried staff are the “inspectors”; 
they may be given assignment to any inspection duty in any part of the field. 
The “special agents” are used largely for agency work, but are not dis¬ 
tricted. The “supervisors” are organized by districts and are assigned 
largely to reporting on schools. These lines are not hard and fast, how¬ 
ever, as any member of the field supervisory force may be assigned to do 
anything that the central office may determine, and be required to report 
anything which comes to his attention and calls for action at any place 
visited. 


53 





MUNICIPAL RESEARCH 


CHARTm- SHOWING IN OUTLINE THE PRESENT ORGANIZATION 
FOR DOING THE WORK THAT WHS DONE BY THE EDUCATIONAL DIVISION 
AT THE TIME THIS REPORT NAS RENDERED 



In dian Superin tendencies 

The unit of organization in the field for handling all of the 
local problems except those of allotment and a part of the irriga¬ 
tion project is what is known as a “superintendency.” The charac¬ 
ter of the organization and activities performed under one of the 
larger superintendencies is illustrated by the following outline of 
the Rosebud Agency in South Dakota: 

Outline showing organization of the Rosebud superintendency, South Da¬ 
kota, July i, 1912 


1. Superintendent . 1 $2,450 

I. Agency: 

1. General administration : 

t. Chief clerk . 1 1,400 

2. Clerk . 1 900 

3. Assistant clerk . 1 720 

4. Lease clerk . 1 i,ioo 


54 











































































































ADMINISTRATION OF THE INDIAN OFFICE 


5. Assistant lease clerk . 1 840 

6. Issue clerk . 1 780 

2. Health and sanitation: 

1. Physician . 1 1,200 

2. Physician . 1 720 

3. Agricultural instruction, adult Indians: 

1. Additional farmers. 6 900 

4. Industrial instruction, adult Indians (also work un¬ 

der “Care of buildings and grounds”) : 

1. Carpenter . 1 600 

2. Blacksmith. 1 720 

3. Blacksmith. 1 240 

4. Wheelwright. 1 1,000 

5. Care and protection of stock: 

’1. Stock detective . 1 1,000 

2. Stockman . 1 720 

6. Policing, maintaining order, etc.: 

1. Chief of police. 1 420 

2. Police privates. 38 240 

7. Care of timber: 

1. Forest guard. 1 960 

8. Care of buildings and grounds (see also “Indus¬ 

trial instruction”) : 

1. Watchman . 1 480 

2. Laborer . 1 360 

3. Laborers. 2 240 

9. Miscellaneous: 

1. Butcher . 1 480 

2. Teamsters . 3 360 

2. Rosebud Boarding School: 

1. Principal and physician. 1 1,500 

1. General administration : 

1. Assistant clerk . 1 840 

2. Disciplinarian . 1 720 

2. Health and sanitation: 

1. Nurse . 1 600 

3. Academic instruction: 

1. Teacher . 1 660 

2. Teacher . 1 600 

4. Kindergarten instruction : 

1. Kindergartner . 1 600 

5. Industrial instruction : 

1. Boys’: 

1. Farming, gardening, etc.: 

1. Farmer . 1 600 

2. Carpentering: 

1. Carpenter. 1 660 

3. Heating and lighting plant: 

1. Engineer . 1 900 

2 Assistant engineer . 1 600 

2. Girls’: 

1. Matron . 1 600 


55 



































MUNICIPAL RESEARCH 


I. Sewing: 

i. Seamstress . i 5 °° 

2. Laundering: 

I. Laundress . I 480 

3. Baking: 

1. Baker . 1 480 

4. Cooking: 

1. Cook . 1 500 

5. Housekeeping: 

1. Assistant matron. 1 5 20 

6. Care of building and grounds: 

1. Assistant . 1 3 °° 

2. Laborers. 3 660 

3. Laborer . 1 420 

4. Laborer . 1 30° 

3. Rosebud day schools: 

1. Day school inspector . 1 1,200 

1. General administration: 

1. Financial clerk. 1 900 

2. Assistant clerk. 1 840 

2. Health and sanitation: 

I. Physician . 1 1,200 

3. Industrial instruction, adult Indians (women) : 

1. Female industrial teachers . 4 720 

2. Female industrial teacher. 1 600 

4. Big White River day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

5. Bull Creek day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

6. Corn Creek day schools: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

7. Cut Meat day* school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

8. He Dog day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

9. Little Crow day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

10. Little White River day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

11. Lower Cut Meat day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

12. Milk’s Camp day school: 

1. Teacher . 1 1,000 

2. Assistant teacher. 1 500 

3. Housekeeper . 1 300 


56 







































ADMINISTRATION OF THE INDIAN OFFICE 


13. Oak Creek day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

14. Pine Creek day school: 

1. Teacher . 1 720 

2. Housekeeper ... 1 300 

15- Red Leaf day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

16. Ring Thunder day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

17. Agency day school: 

1. Teacher . 1 600 

18. Spring Creek day school: 

1. Teacher . 1 720 

2. Housekeeper ... 1 300 

19. Upper Cut Meat day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

20. Whirlwind Soldier day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

21. White Thunder day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

22. Black Pipe day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

23. Tronwood day school: 

1. Teacher . 1 720 

2. Housekeeper . 1 300 

24. Repair of day school buildings: 

1. Carpenter . 1 720 


Altogether there are over 200 of these agencies. Besides, there 
is an organization for looking after Indians who are not within 
the jurisdiction of any superintendency—as, for example, a spe¬ 
cial agent in charge of the scattered bands of Indians in Utah, the 
commission to negotiate with the Seminole Indians in Florida, etc. 

For purposes of administration, the Indian superintendencies 
are grouped in six districts, as follows: 

District No. 1—Embracing Colorado, New Mexico, Utah, Wyoming. 
Kansas, and all of Oklahoma except the Five Civilized Tribes. 

District No. 2—Embracing Arizona, California and Nevada. 

District No. 3—Embracing Nebraska, North Dakota and South 
Dakota. 

District No. 4—Embracing Idaho, Montana, Oregon and Wash¬ 
ington. 


5/ 




























MUNICIPAL RESEARCH 


District No. 5—Embracing Minnesota, Wisconsin, Michigan, Iowa, 
Pennsylvania, North Carolina, New York and Virginia. 

District No. 6—Embracing the Five Civilized Tribes in Oklahoma. 

The several superintendencies which are organized as district i 
are shown on Chart 6. 



58 



























































ADMINISTRATION OF THE INDIAN OFFICE 


The Field Irrigation Service 

This branch is organized for the purpose of handling all irriga¬ 
tion matters. It has supervision of surveys, estimates, and con¬ 
struction of all the irrigation work in the service. 



59 




































































MUNICIPAL RESEARCH 


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The organization consists of i chief inspector of irrigation, who 
performs the duties of a chief engineer; i assistant inspector of 
irrigation, who performs the duties of assistant chief engineer; 
and 7 superintendents of irrigation. 


6o 












































































































ADMINISTRATION OF THE INDIAN OFFICE 


The arid region is divided into five districts, and each district 
is under the direct supervision and charge of a superintendent 
of irrigation. 

One of the other superintendents of irrigation is a skilled 
mechanical and electrical engineer, and has general charge of 
construction and operation of all mechanical and power plants. 

The seventh superintendent of irrigation is a man with special 
knowledge of irrigation law and water rights. 

Under the present plan all surveys for irrigation work are 
made under the supervision of the superintendent of irrigation 
in whose district the reservation is located. Construction is also 
under the same supervision, except where it is of such small ex¬ 
tent that it is more economical to have it done under the super¬ 
vision of the superintendent of the reservation. 

Maintenance and operation on the larger reservations are also 
under the supervision of the superintendent of irrigation, but on 
the smaller and less important ones it is under the superintendent 
of the reservation. 

Field Allotment Serv-ice 

Field allotment service is composed of three classes of persons 
who are directly responsible to the Commissioner of Indian Af¬ 
fairs, namely: (i) the appraising commissioner; (2) special 
allotment agents; (3) employees on reservations acting as al- 
loting agents. The work of the alloting service is to apportion or 
allot tribal lands to individuals for which purpose it is necessary 
to have surveys made and other work done in order to establish 
a basis for allotment. The allotment service falls under the 
Land Division in the Indian Office at Washington in which there 
is an allotment section. This service may also be brought inde¬ 
pendently under scrutiny of the general inspection staff, as well 
as the special agents under the Commissioner of Indian Affairs. 
The outline of the organization of the field service is shown on 
Chart 5. 


61 



CHAPTER V 


PREPARATION OF ANNUAL ESTIMATES FOR 
APPROPRIATIONS 

The methods and practices of the Office of Indian Affairs, the 
purpose of which is to produce information as a basis for official 
action, or as an account of stewardship, are described under the 
following heads: 

1. Preparation of the annual estimates for appropria¬ 
tions by Congress. 

2. Preparations of the annual estimates of revenues and 
receipts. 

3. Issuing authorities to spend money. 

4. Requisition for funds to disbursing officers. 

5. Methods of accounting. 

6. Examination and audit. 

The first of these is the subject of this chapter. The subjects 
are discussed in the chapters which follow. 

The Purpose of Estimates 

The purpose of the annual estimates for appropriations is to 
provide the Office of Indian Affairs with a definite schedule of 
needs of the different agencies and schools for a fiscal year. The 
means selected for doing this is to require each disbursing officer 
of an agency or school, in conference with other officers and em¬ 
ployees, to formulate annually, upon blank forms furnished for 
this purpose, a program of subsistence and maintenance for each 
agency or school falling under his jurisdiction. These are for¬ 
warded to the Indian Office with the date filled in, showing in 
estimate form the amounts requested for use during the entire 
fiscal year in the office, in schools and shops, for farm work, 
repairs, erection of buildings, etc., as well as the amounts re¬ 
quested for the support of the Indians. 

The Form Used 

The form used for advance estimates for appropriations (No. 
5-265) is so arranged as to show in the heading the functions 

62 


ADMINISTRATION OF THE INDIAN OFFICE 


(or kind of work carried on by each agency reporting) and the 
appropriation for each appropriation item. That is, one sheet is 
used for each appropriation item of which expenditures for each 
function or activity are paid. The detail analysis of estimated 
expenditures on each sheet is as follows: 


VERTICAL 

(Character of expenditures) 
Supervision of Indians: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Other expenses. 

Total. 

Education: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Other expenses. 

Total. 

Health: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Other expenses. 

Total. 

Agriculture and stock: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Other expenses. 

Total. 

Allotments: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Total. 

Irrigation: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Other expenses. 

Total. 


Eorestry: 

Current expenses. 

Repairs to buildings and property. 
New construction and equipment. 
Other expenses. 

Total. 

Field matrons: 

Current expenses. 

New equipment. 

Total. 

Suppression of liquor traffic : 
Current expenses. 

New equipment. 

Total. 

HORIZONTAL 

(Articles to be purchased) 
Salaries and wages (present ser¬ 
vices). 

Traveling expenses (transportation 
of persons). 

Transportation of supplies. 
Telegraph and telephone service. 
Printing, binding, advertising, etc. 
Heat, light and power service. 

Dry goods, wearing apparel, etc. 
Fuel. 

Forage. 

Medical and surgical supplies. 
Subsistence supplies. 

Equipment. 

Material for construction and re¬ 
pairs. 

Rent. 

Miscellaneous. 

Total. 

Allowed for fiscal year 1914. 
Remarks by superintendent. 

Amount allowed by Indian Office. 
Remarks by Indian Office. 


For the guidance of the disbursing officers, the following in¬ 
structions are printed on the reverse side of the budget estimate 
sheet: 


63 




MUNICIPAL RESEARCH 


In order that an intelligent estimate may be made to Congress for 
appropriations for the fiscal year ending June 30, 1915, disbursing 
officers are required to indicate their needs for that year on these 
blanks, grouping all expenses payable from a given appropriation or 
fund on the same sheet. Be careful to designate correctly each ap¬ 
propriation or fund and do not include in any appropriation items 
which are not payable therefrom. 

The column headed “Remarks by superintendent” should be used for 
justification, if space is sufficient; if not, prepare justification on sepa¬ 
rate sheet, numbering items on sheet to correspond with numbers usea 
on justification. 

Section 26 of the Indian appropriation act for the fiscal year 1914 
provides that estimates shall be submitted in detail for each activity 
of the service, such as supervision of Indians, education, health, agri¬ 
culture and stock, allotments, irrigation, forestry, etc. 

Supervision of Indians will include all charges formerly included 
under agency, except those mentioned in the special classes following. 

Education will include all charges for education of Indian pupils, 
except health items. 

Health will include all charges in connection with health, such as 
salaries of physicians, nurses and hospital attendants, purchase of 
medical and hospital supplies, construction of hospital buildings and 
sanatoriums. 

Agriculture and stock will include salaries and expenses of farmers 
and stockmen, cost of equipment and supplies used by them, and live 
stock purchased for breeding purposes. 

Allotments will include all charges in connection with allotment 
work. 

Irrigation will include all charges in connection with construction, 
operation and maintenance of irrigation works. 

Forestry will include all charges in connection with the care and 
preservation of timber. 

The act further provides that each activity be subdivided so as to 
show amounts for current expenses, upkeep of buildings and property, 
new construction and equipment, and for other expenses. 

Current expenses will include all items for the ordinary conduct of 
a school or agency not falling within the other three classes. 

Upkeep of buildings and property will include all charges for labor 
and material in connection with the repairs of buildings and perma¬ 
nent school or agency plant. 

New construction and equipment will include construction of new 
buildings and permanent improvements, and purchase of new equip¬ 
ment. Equipment will include all non-expendable property. The cost 
of all power-driven machinery installed in buildings and all appliances 
and equipment permanently attached to buildings will be included 
under appropriations for buildings. The cost of hand tools' used in 
connection with building construction and repairs, such as pipe cutters, 
stocks and dies, carpenter tools, etc., is not chargeable to building 
appropriations, but will be charged to appropriate support funds. 

Other expenses will include expenditures of an unusual nature, such 
as per capita payments to Indians, purchase of animals, agricultural 

64 



ADMINISTRATION OF THE INDIAN OFFICE 


implements, etc., for Indians, payable from reimbursable appropria¬ 
tions, and other expenditures of this general character. 

In the column headed “Salaries and wages” should be included the 
estimated amount for all labor, regular and irregular, except labor in 
lieu of rations, which should be included in column headed “Miscel¬ 
laneous” and item explained in justification. 

In the column headed “Heat, light and power service” charge for 
service only should be entered, not the cost of fuel. 

In estimating for construction of new buildings, the estimated cost 
for labor and material for each building should be shown separately 
in the justification. 

Estimates should be submitted in units of dollars, cents being 
omitted. 

These estimates must be prepared in quintuplicate and returned to 
the Indian Office in time to be received not later than August i, 1913, 
as they are required for use in making up the estimates for appropria¬ 
tions required by the Secretary of the Interior to be submitted to the 
department early in September. This does not take the place of the 
annual estimate blanks which are to follow. 


Examination of Estimates at Central Office 

Each disbursing officer prepares as many “estimates” forms as 
there are appropriation accounts provided for his use. And in 
ca$e there are several activities maintained from one appropria¬ 
tion, then he segregates the appropriation estimate in such man¬ 
ner as to show the amount for each activity affected. The esti¬ 
mates, when received in the Office of Indian Affairs from the dif¬ 
ferent disbursing officers, are sorted according to appropriation 
accounts; that is, the estimates from all agencies for a single 
appropriation are brought together. 

Invariably the estimates are reduced by the Indian Office. In 
some instances the reduction is as great as fifty per cent. It is 
common practice, therefore, for disbursing officers to overestimate 
their needs in anticipation of a reduction. 

In making adjustments in the estimates the central office con¬ 
sults the financial tables which show the expenditures of the pre¬ 
vious year for the same appropriation accounts. Although great 
emphasis is laid upon personal knowledge of conditions at the 
different reservations, statistical data are consulted. Special in¬ 
quiries are made occasionally to test the statements which accom- 
panv each item in the estimates. Frequently it seems advisable 
to reduce the total of the estimates of all disbursing officers apply¬ 
ing for funds under a specific appropriation to an amount which 
was allowed bv Congress in the previous year’s appropriation bill. 


65 



MUNICIPAL RESEARCH 


Such cuts are made because it seems to be a common understand¬ 
ing that if an appropriation of the same amount is requested little 
opposition will be raised. It frequently happens, therefore, that 
the estimate of needs is not examined as to individual items 
therein, but as to the total of all estimates under the same appro¬ 
priation, with the idea that subsequently an adjustment satisfac¬ 
tory to the different disbursing officers can be effected. 

Approval Before Presentation to Congress 

The A r arious estimates for appropriations are assembled and 
transmitted to the Indian Office for preparation in order of 
the items in the Indian bill. The assistant commissioner in 
turn transmits the proposed bill to the commissioner for ap¬ 
proval. Upon review the commissioner may deem it ad¬ 
visable to make transfers, adjustments, and changes; more fre¬ 
quently, however, after familiarizing himself with the estimate 
as submitted, he transmits it to the Secretary of the Inte¬ 
rior. The Secretary of the Interior, after giving to the estimate 
as submitted to him such attention as may seem necessary, trans¬ 
mits it to the Secretary of the Treasury, who in turn sends it to 
Congress. When received by Congress the proposed bill is re¬ 
ferred to the Committee on Indian Affairs of the House of Rep¬ 
resentatives for consideration and examination. As a matter of 
fact, the estimates at times are reviewed by the Committee on 
Indian Affairs before Congress meets, preparatory to such cus¬ 
tomary reference. 

Action Taken by Committee on Indian Affairs 

Upon receipt of the annual estimate the House Committee on 
Indian Affairs institutes hearings. At these hearings testimony 
is taken from commissioners, their deputies, chiefs of divisions, 
examiners, investigators, disbursing officers, agents, and others 
for the purpose of determining whether the estimate as submitted, 
in the opinion of members, represents the needs as stated. From 
time to time the committee requests the Office of Indian Affairs 
to supply to it supplementary statements on different matters of 
a financial nature. The committee endeavors to satisfy itself as 
to the propriety of each proposed appropriation item. 

After the hearings the congressional committee prepares an ap- 


<56 




ADMINISTRATION OF THE INDIAN OFFICE 


propriation bill which materially modifies the estimates or re¬ 
quests for appropriations as originally presented. In some in¬ 
stances certain appropriations asked for are entirely wiped out, 
others are cut fifty per cent or more, others are left intact, others 
may be increased as a result of the showing made by subordi¬ 
nates in the office or in answer to official pressure. The House 
Committee on Indian Affairs reports its bill on the floor, after 
which it may be modified in either branch. Finally passed and 
signed by the President, the appropriation becomes law govern¬ 
ing the Indian Office for the next fiscal year. 

Apportionment of Items of Appropriation 

The Indian appropriation act contains many items or amounts 
which are for use for some particular activity or function in all 
agencies and schools. For example, an appropriation item may 
be ‘‘Pay of Indian police” or “Industrial work and care of tim¬ 
ber,” or “Pay of judges, Indian court.” These items must be 
apportioned over the various agencies and schools, and it becomes 
the duty of the board of estimate and apportionment to do this 
work. The procedure followed by this board is to adjust, cut and 
rearrange the amounts submitted by the disbursing officers in their 
original estimates to such figures and amounts the sum total of 
which will not exceed the amount of the appropriation item passed 
by Congress. 

The original estimates of needs are the main guide of the board 
of estimate and apportionment, which also avails itself of infor¬ 
mation which was previously used by the different divisions of 
the Office of Indian Affairs in establishing the original amounts 
for the proposed appropriation bill to be submitted to Congress. 
The board again reviews the disbursing officers’ “justification,” 
statistical data contained in annual reports and similar data, finan¬ 
cial statements of expenditures for the preceding year, and any 
other data at band at that time. It is purely a matter of discre¬ 
tion with the board how much each disbursing officer shall be 
allowed or, using its language, “allotted.” 

Experience has shown it to be wise for the Office of Indian 
Affairs to retain a certain portion of each appropriation amount 
in the form of a reserve in order to meet unforeseen expenditures 
of an emergency character, or expenditures which accrue through 
a change of policy, inadequacy of an estimate or allotment, a 


67 



MUNICIPAL RESEARCH 


change in prices, an increase in labor requirements, a violation of 
contract, or any other matter of a similar character which would 
have a tendency to increase the amount to be expended. In some 
instances this reserve amounts to only 2 per cent or 3 per cent of 
the total appropriation, while in others it may be as high as 15 
per cent or 20 per cent. It would be a fair statement to say that 
on the average a reserve of 10 per cent is set aside. 

Annual Contracts Against Appropriations 

Because of the amount of time consumed by the procedure out¬ 
lined in the foregoing, in a great many instances it becomes neces¬ 
sary for the Office of Indian Affairs to let contracts for supplies, 
materials and equipment before the appropriation act becomes 
effective. It receives bids, selects the successful bidder, draws 
up a contract with all qualifications and stipulations as to delivery, 
price, quantity, etc., with the proviso that this contract will hold 
good if the necessary amount is appropriated by Congress to 
cover the contract. 

After it has taken account of all encumbrances and all special 
requests, bearing in mind the importance of the justification, etc., 
the “board of apportionment” prepares a statement of allotment, 
which shows the exact amount that each disbursing officer is al¬ 
lowed from each appropriation, against which he may make re¬ 
quests for the issue of “authorities” for the purchase of specific 
services or supplies. 

Notices of Allotment 

As notice of allotment the Commissioner of Indian Affairs 
transmits to each disbursing officer a copy of the original estimate 
changed to conform to his final allotments. This copy, therefore, 
not only serves as a notice of allotment, but also shows how much 
the estimate was reduced. Having performed this service, the 
“board of apportionment” ceases to exist for the year. When 
further allotments have to be made from the reserve, it is done 
by the officers of the Office of Indian Affairs. 


68 





CHAPTER VI 


PREPARATION OF THE ANNUAL ESTIMATES OF 
REVENUES AND RECEIPTS 

The nature of the item of moneys received determines its 
grouping under one of the following main classifications: 

(a) Income on the funds of the several Indian tribes. 

(b) Miscellaneous receipts. 

c) Individual Indian moneys. 

(d) Special deposits. 

Income on Funds of the Several Indian Tribes 

What is called income of the several Indian tribes consists of 
the accruals to amounts'held in trust or due to tribes under treaty 
and other agreements. Part of these accruals do not pass through 
the accounts of disbursing agents, but are taken up directly on the 
books of the Treasury. Some of these may be exactly estimated 
and others may not. For example, a tribe has a trust fund in 
the Treasury which bears interest at a fixed rate per annum. In 
this and similar cases the annual income for the next year can be 
estimated exactly. If, however, the trust fund is in process of 
proration to members of the tribe, under the provisions of the 
act of March 2, 1907, or if the trust fund is being increased by 
receipts from the sale of land, etc., the annual income will vary 
according to the deposits or withdrawals and the income cannot 
be exactly estimated in advance. 

Miscellaneous Receipts 

All items of revenue which come into the hands of disbursing 
officers from miscellaneous sources are classed as miscellaneous 
receipts. In accordance with the act of July 1, 1898, each Indian 
agent must account for all funds coming into his hands as cus¬ 
todian from any source whatever and be responsible therefor 
under his bond. In an order issued by the Commissioner of In¬ 
dian Affairs and approved by the Secretary of the Interior on 
June 14, 1910, disbursing agents are instructed to report all mis¬ 
cellaneous receipts in accordance with a definite classification. 


69 


MUNICIPAL RESEARCH 


This classification, as modified by order of November 20, 1913, 
is made up of Classes I to V, inclusive, as follows: 

Class /.—Into Class I fall all net receipts which must be sent 
to the Treasury and which are not available for expenditure by 
the disbursing officer. What is meant by “net” receipts is the 
total amount received less the necessary expenses and sales which 
are authorized to be paid from these receipts. The eight sources 
of these receipts are: 

1. Sale or rent of buildings erected from gratuity appro¬ 
priations. 

2. Sale of any property purchased from gratuity appro¬ 
priations. 

3. Sale of any property purchased from appropriations 
or funds which cannot now be ascertained. 

4. Sales of hides from stock purchased from gratuity 
appropriations for breeding or dairy purposes or for sub¬ 
sistence of pupils. 

5. Transportation charges added to price of subsistence 
supplies sold. 

6. Rent of water from agency or school, water or irriga¬ 
tion system. 

7. Payment by transportation companies for goods lost 
in transit which were purchased from gratuity appropriations. 

8. Fees collected for heirship hearings under the act of 
June 30, 1913 (38 Stat. L., 80). 

Class II .—Into Class II fall all net receipts in the nature of 
reimbursement of appropriations which are available for re¬ 
expenditure for the purposes of the original appropriation. To 
arrive at the net amount to be so credited the necessary expense 
of sales, if authorized, may be paid from the total received. The 
eight sources of these receipts are: 

1. Sale of buildings erected from tribal funds. 

2. Sale of any property purchased from tribal funds. 

3. Sale of hides from stock purchased from tribal funds. 

4. Sale of hides from stock purchased from gratuity ap¬ 
propriations for subsistence of Indians other than pupils. 

5. Refunds of overpayments from any appropriations. 

6. Payments by transportation companies for goods lost 
in transit which were purchased from tribal funds. 


70 




ADMINISTRATION OF THE INDIAN OFFICE 


/. Tuition fees paid for white children enrolled in Indian 
schools under the acts of March i, 1907 (34 Stat. L., 1018), 
and March 3, 1909 (35 Stat. L., 783). 

8. Amounts received in payment for implements, stock, 
etc., sold to Indians under reimbursable agreements. 

Class III .—Into Class II fall all amounts received under the 
provisions of the act approved March 3, 1887, and which are ac¬ 
counted for as proceeds of labor of the Indians outside of schools, 
and used for the benefit of one or another of the several tribes. 
This is in the nature of a discretionary fund. The Secretary of the 
Interior is authorized to use this money in such manner and for 
such purposes as in his judgment seem best. He is required to 
submit to Congress annually a detailed report of moneys received 
and the uses to which they were put. The necessary expendi¬ 
tures for labor, sale, collection, etc., may be paid from these re¬ 
ceipts. There also exists a general authority which confers on all 
disbursing agents the right to sell the products of tribal lands. 
These are shown below as items 3, 4 and 5 in this class. The 
eleven sources of these receipts are: 

1. Sale of timber cut from tribal lands. 

2. Sale of town lots and other tribal lands under special 
acts of Congress. 

3. Sale of lumber manufactured at agency mills from 
timber cut on tribal lands, except at the Menomonee Mills. 

4. Sale of any other products of tribal lands which are not 
the result of labor of individual Indians. 

5. Sale of any property purchased from Class III funds 
or “Indian moneys, proceeds of labor" belonging to Indians. 

6. Rent of buildings erected from tribal funds. 

7. Leasing of tribal lands. 

8. Grazing on tribal lands. 

9. Trespass on tribal lands. 

10. Rights of way on tribal lands. 

it. Royalties on coal, oil, gas and asphalt from tribal lands, 
lands. 

Class IV .—Into Class IV fall all receipts such as the proceeds 
of the sales of products of schools and all other amounts obtained 
otherwise than by appropriation, which are to be expended for 
the benefit of such agency or school, where the things sold are 


7 1 



MUNICIPAL RESEARCH 


produced. There exists a general authority which confers on dis¬ 
bursing officers the right to sell the products of the agencies and 
schools enumerated under this class at such time and in such 
manner as they may think best. They are permitted to make 
expenditures from these receipts before they are deposited in the 
Treasury for any legitimate purpose which will benefit the agency 
or school producing these receipts. After the receipts have been 
deposited in the Treasury, they are carried on the books of the 
Indian Office under the caption “Indian moneys, proceeds of 
labor—agency” or “Indian moneys, proceeds of labor—schools,” 
depending upon the source. This distinguishes them from the 
moneys received in Class III, which are designated as “Indian 
moneys, proceeds of labor—Indians.” There is one restriction 
which causes a division of the account indicated, viz., that re¬ 
ceipts from schools cannot be used for “agency” purposes. All 
articles purchased with these moneys are regarded as Govern¬ 
ment property and must be accounted for as such. The ten 
sources of these receipts are: 

1. Sale of property purchased from Class IV funds or 
“Indian money, proceeds of labor,” belonging to agencies. 

2. Sale of property purchased from Class IV funds or 
“Indian moneys, proceeds of labor,” belonging to schools. 

3. Sale of agency products. 

4. Sale of school products other than those mentioned in 
paragraph 10. 

5. Sale of hides from stock produced at agencies. 

6. Sale of hides from stock produced at schools. 

7. Pasturage on agency lands. 

8. Pasturage on school lands. 

9. Fines imposed by courts of Indian offenses. 

10. School entertainments, band concerts, athletic con¬ 
tests, sale of curios or of fancy articles manufactured by 
pupils, subscriptions to school journals or advertising therein, 
job printing, or any other like enterprise. 

Class V .—Into Class V fall all receipts which are collected in 
fees to pay for advertising the sale of Indian allotments. When 
the receipts are deposited in the Treasury they are carried on the 
books of the Office of Indian Affairs under the caption of “In¬ 
dian moneys, proceeds of labor—advertising.” These receipts 


72 



ADMINISTRATION OF THE INDIAN OFFICE 


may be expended by disbursing officers for purposes for which 
they are collected, but for no other purpose, and they need not be 
deposited in the Treasury except as specially provided. The 
designation of these receipts on the report is, “Fees collected to 
pay for advertising the sale of Indian allotments.” 

Individual Indian Moneys 

In addition to the miscellaneous receipts just enumerated under 
the five different classes, the disbursing agents collect moneys 
known as “individual Indian moneys.” These represent funds, 
regardless of their derivation, which belong to individual Indians, 
that come into the custody of the disbursing officers. The eight 
sources of these receipts are: 

1. Sale of Indian allotments. 

2. Sale of timber cut on Indian allotments. 

3. Rental of Indian allotments for agricultural purposes. 

4. Rental of Indian allotments for mining purposes. 

5. Royalties on minerals from Indian allotments. 

6. Earnings of school pupils or money received from any 
source for delivery to them. 

7. Miscellaneous individual Indian moneys. 

8. Interest on bank accounts. 

Special Deposits 

Still another group of receipts which fall within the hands of 
disbursing officers is designated as “special deposits.” These spe¬ 
cial deposits are moneys received as guaranty of good faith in 
proposed transactions between third persons and individual In¬ 
dians. They represent deposits accompanying bids for the pur¬ 
chase of allotments of land, deposits to insure payment of damages 
in consequence of rights of way across allotments, etc. The five 
sources of these receipts are: 

1. Deposits with bids for lands belonging to individual 
Indians. 

2. Deposits with bids for timber, etc., from lands belong¬ 
ing to individual Indians. 

3. Guaranty deposits for right-of-way damages (indi¬ 
vidual Indian). 

4. Guaranty deposits for right-of-way damages (tribal). 

5. Deposits with bids for timber or other products of 
tribal lands. 


73 



CHAPTER VII 


ISSUING AUTHORITIES TO SPEND MONEY 

In the Indian Service three official acts are necessary to au¬ 
thorize an expenditure: 

1. An appropriation must be made. 

2. The appropriation must be allotted. 

3. The agent must obtain specific authority to expend. 

The methods incident to making the annual appropriations' and 
the allotments have already been described. It remains to de¬ 
scribe the issuing of authorities to agents to expend the amounts 
which have been appropriated and allotted. 

Definition and Use of Authorities 

An “appropriation” is an authorization by Congress to the Sec¬ 
retary of the Interior to expend an amount for a designated func¬ 
tion or purpose. An ‘‘allotment” is an authority by the Secretary 
of the Interior or Commissioner of Indian Afifairs to spend a 
certain amount of each appropriation at a particular agency for 
the designated purpose. An “authority” is a grant given by a 
superior officer to a particular Indian agent, to expend money 
from a specific allotment. 

Authorities serve the purpose of providing a means, whereby 
the Office of Indian Afifairs may be kept currently informed of 
purchases and expenditures made, or to be made, in the field or 
through issue from warehouses. They are purely * administra¬ 
tive in their significance. All authorities group themselves into 
one of three classes : 

Authorities A. 

Authorities B. 

Authorities C. 

Authorities “A” and “B” cover grants to disbursing officers to 
expend money or ratify expenditures already made pursuant to 
general orders. Authorities “C” cover purchases to be made 
through the Office of Indian Afifairs, warehouses, or upon open 


74 


ADMINISTRATION OF THE INDIAN OFFICE 


market order, payment for which is to be made by claim through 
the Office of Indian Affairs. Disbursing officers may not expend 
money under authorities “C.” 

Requests for Authorities by Disbursing Officers 

Authorities “A" are issued on request of a disbursing officer 
for authority to expend money from funds “allotted” to the 
agency or school under his jurisdiction. 

Authorities “B” are issued on request of a disbursing officer for 
approval of expenditures already made from funds “allotted” to 
the agency or school under his jurisdiction. The expenditures 
thus to be ratified are made to meet emergencies. No “authori¬ 
ties” are required for expenditures of “receipts” which are not 
“allotted.” 

Form of Request for Authority 

When a disbursing officer wishes to expend money for a pur¬ 
pose which falls within those for which the various appropria¬ 
tion amounts allotted to him can be used he prepares a “request” 
on a form provided for that purpose. It is drawn in duplicate, 
and the original is forwarded to the division of finance of the 
Office of Indian Affairs. 

It is printed on a sheet 8 by io l / 2 inches, with heading printed 
as follows: 

Department of the Interior, 

United States Indian Service, 


The Commissioner of Indian Affairs, 

Washington, D. C. 

Sir : Authority is respectfully requested to expend, during the fiscal year 

191—, the sum of $-from the appropriation. __ 

Do not write in 
this space. 

(1) .$. $. 

( 2 ) .$. $. 

( 3 ) .$. $. 

( 4 ) .;.$. $. 

for the following: 


Beneath this heading the following columns are provided: 

Object. 

Unit price. 

Amount. 

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MUNICIPAL RESEARCH 


At the lower left corner of the form provision is made for the 
entry of the date and amount of the authority. At the lower right 
corner provision is made for the disbursing officer’s signature. If 
a form is not available the disbursing officer’s request may be 
made by letter, or by wire if quick action is important. The re¬ 
quest, letter, or wire is received by the mails and files division, 
with the various necessary “transfer slips” attached, which indi¬ 
cate the routing of the documents. When it is so prepared, it is 
transferred to the finance division for the attention of the clerk in 
charge of issuing authorities. 

Examination of Requests for Authorities 

The three forms—“the request for authority,” the “designa¬ 
tion of fund memorandum,” and the “transfer slip” are referred 
to the bookkeeper, who has charge of the account in question. He 
examines the request and designates the fund against which, in 
his judgment, the proposed expenditure should be charged, if ap¬ 
proved. If the fund has been already designated on the request 
for authority by the disbursing officer, he signifies his approval 
by marking on the “designation of fund memorandum” “O. K.” 
The bookkeeper returns the request form to the chief clerk in 
charge, who examines the designation of fund on the memoran¬ 
dum and, if he agrees, initials it and transfers the request and the 
other papers attached thereto to the education division for ad¬ 
ministrative action. From information at hand, either in the 
files or through personal knowledge, this division is presumed to be 
in a position to pass upon the need for the expenditure requested. 
As a result, its approval or disapproval, or even modification, 
constitutes ground sufficient for further steps in the preparation 
of the authority by the finance division. In some instances, where 
these authorities involve large sums of money and cover especially 
important matters, at this stage other divisions are consulted, or 
the matter may even be referred to the commissioner. In most 
instances, however, requests are passed upon by the education 
division, without reference to other divisions, and come to the 
notice of the commissioner only after the regular procedure has 
been complied with. The education division returns all papers 
connected with the case, with its approval or disapproval, to the 
finance division. 


76 



ADMINISTRATION OF THE INDIAN OFFICE 


Preparation of Authorities 

The chief clerk in charge of authorities examines the request 
and its approval by the education division, and, if he notes no 
flaws therein, refers the matter to the clerk, who prepares, in 
triplicate, authority “A” or authority “B” from the approved 
requisition. This form consists of a sheet 8 by io J / 2 . At the top 
of the form the following heading appears: 


Department of the Interior, 

Office of Indian Affairs, 

Washington, D. C. 


AUTHORITY. 


Authority is hereby granted for you to expend, during the fiscal year 
191—, the sum of $- from the appropriation. 

(1) . $. . 

(2) . $. $. 

(3) . $. $. 

( 4 ) . $. $. 

for the following: 


Beneath this heading special columns are provided for the par¬ 
ticulars as follows: 

Obj ect. 

Unit price. 

Amount. 

Beneath these columns, in the lower right corner, provision is 
made for the initials of the employee handling the forms for the 
entry of the amount and also for the signature of the acting com¬ 
missioner. 

At the bottom of this form, in the left corner, appear blank 
lines as follows: 


(Title of name.) 

(School.) 

(Post office.) 

In a number of instances the authority has been typed in its 
required detail by the disbursing officer in the field and has been 
transmitted to the finance division at the time when the request 
for an authority was made. When this is the case, the chief of 
the section in charge of authorities does not refer the requisition 
to the clerk, but verifies the correctness of the statement and 
transmits all papers to the bookkeeper in charge of the “liability 


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MUNICIPAL RESEARCH 


ledger,” as is done regularly with all other authorities after they 
have been handled according to the procedure described in the 
foregoing. 

Recording of Authorities 

Upon receipt of authorities, the bookkeeper in charge of the 
“liability ledger” makes an entry in different columns, depending 
upon the nature of the authority. If it is to cover an annual esti¬ 
mate for supplies which have been acted on prior to allotment, it is 
entered in the column under the heading “annual contract 
chargesif it is to be charged against the original apportionment, 
it is entered in the column under the heading “charges—regular 
apportionment.” After such entry the ledger clerk places his 
initials in a space provided on the authority in the lower right 
corner and returns all papers to the clerk in charge of issuing 
authorities. That clerk then initials the authority, after he has 
determined that it is properly awarded and has again checked the 
appropriation against which it is issued. 

Final Approval of Authorities 

If the authority embraces the expenditure of more than $500, it 
is stamped with a certificate to be signed by the assistant secre¬ 
tary. If it is for an amount of $500 or less, it is stamped with a 
certificate to be signed by the Acting Commissioner of Indian 
Affairs. The papers are then ready for transmittal and further 
approval. 

The Chief of the Finance Division next examines them and 
initials them if he finds everything to be correct. Frequently it 
occurs at this point that the Chief of the Finance Division does not 
agree with the designation of fund. In case he makes a change 
and the authority has again to pass through the procedure of 
registration, preparation, etc., a change has to be made on the 
liability ledger, an appropriate entry is made under the appro¬ 
priation account which the Chief of the Finance Division desig¬ 
nates. If the authority is to be signed by the Assistant Secretary, 
it is then transmitted to the commissioner, who initials it and 
transmits it to the Assistant Secretary. 

Final Disposition of Papers 

After proper approval has been obtained the first and third 
copies of the authority are sent to the disbursing officer along 


78 



ADMINISTRATION OF THE INDIAN OFFICE 


with inclosures and tags attached by the Mails and Files Division. 
The second copy of the authority is returned to the chief clerk of 
the Finance Division in charge of authorities, who instructs a clerk 
to prepare a file record from it. It is then used to check entries 
made against the various appropriation accounts and to note 
whether the authority has been properly approved and has passed 
all stages of the procedure. The request for authority is trans¬ 
mitted to the Mails and Files Division, where it remains. The 
second copy of the authority is placed in the files of the Finance 
Division. 

Record of Amounts Expended Kept on Each Authority 

If it be an “A” authority, the copy is atached to a sheet 8 by 
io l / 2 inches. At the top of this sheet the following form is 
printed: 

Examiner., i Qr.;.,2 Qr.;.,3 Qr.;., 4 Qr 

Authority No., dated., 19. . ; $. 

(Original filed with voucher No.quarter, 18. ..) 

In . sheets—Sheet No.; $. 

For Agency—School—Police—Field—Matron, . 

(Draw pen through those which do not apply.) 

Appropriation: . 


Beneath this head appear eight columnar ruled spaces headed 
“To Be Expended for.” In these spaces are to be entered the 
various authorities, modifications, etc., of these authorities, under 
that specific appropriation. Beneath this column ruled off with a 
double line are columnar rulings with the following headings: 

Qr. 

Vo. 

Items. 

Amount. 

This space is provided for the purpose of recording expendi¬ 
tures which were made under these authorities by disbursing 
officers. These entries are made upon receipt of the quarterly 
accounts in the account section of the Finance Division. 

Record of “B” Authorities 

Since “B” authorities are issued to ratify expenditures already 
made because of their emergency character, the copy of a “B” 


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MUNICIPAL RESEARCH 


authority is attached to a form headed “Authorities Expended/' 
This form is 8 by io ^4 inches in dimension, and at the top of the 
form the following is to be found: 

AUTHORITIES EXPENDED 

At. 

Columnar rulings provide for the following headings: 

Authority No. 

Date. 

Amount. 

Voucher. 

Quarter. 

Examiner. 

This constitutes a record for the Finance Division when it is 
necessary to refer to authorities granted and passed. 

Delays and Lost Papers 

It frequently happens that there are delays in the course of ap¬ 
proval. These delays may be prompted by many causes, as a de¬ 
sire to get additional information on the request, or a difference of 
opinion as to the advisability of performing the work in the 
manner specified in the authority. In such instances the authority 
may remain unapproved for a considerable length of time, and it 
frequently happens that the second copy of the authority does not 
reach the Finance Division. This sometimes happens with au¬ 
thorities that have not been approved, as well as with those that 
have received approval. As a result, the Finance Division is 
unable to check its entries and prepare its file. When the 
authority goes astray the file record is prepared from the memo¬ 
randum entries in the liability ledger. When the authority has not 
been granted and the second copy is lost in the path of procedure, 
the liability ledgers remain encumbered with the authority, sup¬ 
posedly granted, and not until an error of some kind directs the 
bookkeeper’s attention to this specific account will the incorrect¬ 
ness of the entry be made known. 

Warehouse Expenditures 

Requests for “C” authorities from disbursing officers are re¬ 
ceived bv the Finance Division. These requests cover purchases 
to be made in open market by disbursing officers or by the superin¬ 
tendents of warehouses for Indian supplies. Upon receipt of this 


80 





ADMINISTRATION OF THE INDIAN OFFICE 


request in the Finance Division it is examined as to the amount 
available. If the amount asked is available, the authority to “pur¬ 
chase in open market” or “order under contract,” as the case may 
be, is made up in duplicate. The original is forwarded to the 
superintendent of the warehouse for Indian supplies at the city 
where the warehouse is located. The duplicate is retained in the 
office of the Finance Division and entered in the proper columns 
of the liability ledger, as is done with other authorities. 

A “C” authority is printed on a sheet 8 by io l / 2 inches, and 
reads as follows: 

Department of the Interior, 

Office of Indian Affairs, 

Washington. 

The Superintendent Warehouse for Indian Supplies, 

Sir: You are requested to order under contract or purchase in open 

market and send immediately to the superintendent of the- School, 

for the use of-, the following: 

Beneath this heading space is provided for the description of 
articles and amount. At the bottom of the above particulars 
appears the following: 

The total cost of the foregoing is estimated to be $-, not ex¬ 

ceeding which sum will be paid through the Indian Office from the 
appropriation -; for quotations see your letter of -, 191—. 

At the bottom of this form provision is made for the signature 
of the second assistant commissioner. 

The copy is retained in the files of the Finance Division, with 
the original request. The superintendent of the warehouse for 
Indian supplies, upon receipt of authority, makes the purchases 
in open market and ships to the superintendent. 


81 









CHAPTER VIII 


REQUISITIONS FOR FUNDS BY DISBURSING 
OFFICERS 

The regulations of the Indian Office require that public funds 
of all classes, no matter from what sources they are received, must 
be immediately taken up in the disbursing officers’ accounts. No 
expenditures whatsoever may be made therefrom except under an 
authority from the office. Emergency expenditures are exceptions 
to the above. 

Requisitions for Expenditures of Public Funds 

The fact that a disbursing officer has had allotted to him a 
certain amount of money for use under a given appropriation 
does not entitle him to make expenditures therefrom. Before so 
doing he must obtain through channels of due procedure an 
authority for the expenditure of funds and obtain a transfer of 
funds from the General Treasury fund to his official credit for 
this purpose. The requisition which the disbursing officer makes 
for funds to be placed to his credit for expenditure is made by 
him either by letter, on a special form, telegram, or verbally. In 
all instances the request serves simply as a means of bringing to 
the attention of the home office that the disbursing officer requires 
funds. The requests are received by the Mails and Files Di¬ 
vision and after due and proper transfer slips have been attached 
and other routine procedure complied with, the requests for funds 
reach the Finance Division, where they are referred to a clerk in 
charge of this work. 

Verification and Checking of Requests 

It becomes the duty of the clerk in charge of preparation of re¬ 
quests for the transfer of funds to carefully examine and verify 
the request. Under the regulations of the Office of Indian Affairs 
the clerk is not permitted to make a cash advance in excess of the 
disbursing officer’s bond. He further is obliged to ascertain the 
cash balance on hand at the time of the last accounting made by 
the disbursing officer. This he obtains from a card record main- 


82 


ADMINISTRATION OF THE INDIAN OFFICE 


tained for this purpose. He is guided mainly by these two re¬ 
strictions. Further, he takes into consideration the condition of 
the appropriation as it stands on the date when the request for 
funds is made. He consults the liability ledger and, if possible, 
tries to ascertain whether an authority was specifically granted for 
the purpose for which funds are requested. If no specific 
authority has been granted he takes into account authorities 
granted under this specific appropriation and compares the total 
of these authorities with the amount alloted the officer making 
the request under this appropriation. 

In instances where the liability ledger shows a small available 
balance the clerk establishes the further fact of refunds. Re¬ 
funds are occasionally not recorded in the liability ledger, and the 
clerk, therefore, consults the appropriation ledger, in which a very 
careful record is made of refunds. If the appropriation ledger 
shows that sufficient money is on hand under this appropriation to 
grant the disbursing officer the advance requested, he O K.’s the 
request, but in no instance is he supposed to approve a request in 
excess of the amount apportioned the disbursing officer under the 
appropriation. 

It is quite often impossible for the clerk to ascertain the exact 
authority against which a cash advance is to be made unless he 
scrutinizes each authority and the purposes for which it is issued. 
If there is something which arouses the suspicion of the clerk, still 
he would be justified in passing a request, provided the cash 
already advanced on previous dates did not exceed the total of 
authorities granted. 

Procedure Prior to the Signing of the Warrant 

After the examination has been made the clerk hands all forms 
and memoranda to a typist, who prepares one yellow copy and 
three white copies. After typing, the copies are returned to the 
clerk, who checks their accuracy. From the yellow copy an entry 
is made in the liability ledger under the proper appropriation 
account into the column “warrants issued,” although actually the 
warrant will not be issued for at least six days, which is the time 
required to complete the procedure of issuing warrants. Entry 
having been made in the liability ledger from the yellow copy, it 
is transmitted to the disbursing officer and serves as his notice 
that a request for funds has been instituted and is in process of 


83 



MUNICIPAL RESEARCH 


preparation. The third copy of the white form remains in the 
office as an office record and is referred to by examiners of 
accounts when they make their audit. The first and second copies 
of the white form are transmitted first to the Chief of the Finance 
Division for purposes of examination and initialing. From there 
they are referred to the acting commissioner for examination and 
signature, who in return refers both copies to the chief disbursing 
officer. The chief disbursing officer retains the second copy, ini¬ 
tials the first, and transmits it to the Assistant Secretary for 
signature. 

The first copy is referred back to the chief disbursing officer, 
who transmits it to the Auditor for the Interior Department for 
approval. After the Auditor has made his examination, he trans¬ 
mits the request to the clerk of the Division of Bookkeeping and 
Warrants, where a warrant is prepared and three copies of a 
transcript of details of the requisition are made on loose-leaf 
ledger sheets. The requisition is attached to the warrant and 
the three transcripts. The requisition with the attached papers is 
then transmitted to the chief of the Division of Bookkeeping and 
Warrants, who inspects and examines all papers. After the pre¬ 
scribed procedure in the Treasury Department has been complied 
with the warrant is signed and notice is sent to the requisition 
clerk of the Indian Office that funds have been placed to the credit 
of the disbursing officer making the request. 

Treatment of Errors Disclosed 

If an error is discovered at any point in the procedure before 
the request reaches the Secretary of the Interior, the requisition is 
returned to the Finance Division of the Office of Indian Affairs 
and changes are made either in the fund account or in the requisi¬ 
tion, but if a flaw is discovered either by the auditor or any other 
official after the Secretary of the Interior has signed and approved 
the requisition, the amount of the requisition remains fixed. 
Thereafter no one has the authority to change the total of the 
requisition. If, for example, it is found that one of the appropria¬ 
tions does not have sufficient funds to cover the amount requested, 
due to a discrepancy between the Treasury records and those of 
the Indian Office, it becomes necessary to return the requisition 
and effect a transfer between two appropriations in such manner 
that the total of the requisition is not changed. In all instances 


84 




ADMINISTRATION OF THE INDIAN OFFICE 


where such a change or one similar is effected, the requisition 
clerk is required to make a change in the liability ledgers and 
notify the chief disbursing officer of the adjustment. If there is 
a flaw which is discovered subsequent to the Secretary of the In¬ 
terior’s signature which can not be rectified because no other ap¬ 
propriations are applicable, the requisition must be canceled by 
following the same course it originally had to take, only in reverse 
order. 


85 




CHAPTER IX 


GENERAL DESCRIPTION OF THE PRINCIPAL 
RECORDS OF ACCOUNTS KEPT IN THE 
INDIAN OFFICE 



The principal records of account kept in the Indian Office by 
means of which information is currently produced are the fol¬ 
lowing : 

1. Appropriation and fund ledgers (Treasury accounts). 

2. Appropriation and allotment ledger (apportionment 
ledger). 

3. Allotment and encumbrance ledgers (liability ledger). 

4. Cost ledgers. 

The character of information produced by each is discussed 
below. 

Appropriation and Fund Ledgers 

The appropriation and fund ledgers serve the purpose of record¬ 
ing each item appropriated by Congress and each trust fund as a 
separate account. Against each account are charged the advances 
of cash from the Treasury for use of disbursing officers and other 
representatives of the Office of Indian Affairs. The entries in the 
appropriation ledgers are of cash transactions. They do not show 
encumbrances—they only provide a record of cash received and 
advanced by the Treasury, including transfers between appropria¬ 
tion accounts and such refunds as the disbursing officers have re¬ 
turned to the Treasury Department—largely made up of amounts 
of authorities not required for the purchase of a given supply or 
service, and amounts not used because the materials and supplies 
authorized were not bought. The accounts in the appropriation 
and fund ledgers are, with a few minor exceptions, an exact 
transcript of those of the Treasury. They divide themselves 
into six groups: 

(a) Trust fund ledgers. 

( b ) Support ledgers. 

( c ) School ledgers. 

( d ) Miscellaneous ledgers. 

(e) Indian moneys ledgers. 

(/) Treaty ledgers. 


86 


ADMINISTRATION- OF THE INDIAN OFFICE 


TRUST-FUND LEDGERS 

The trust-fund accounts are contained in ledgers kept in the Finance 
Division in a loose-leaf form, and cover Indian trust funds of all tribes, a 
page or more being used for each tribe. The form consists of a sheet i 8$4 
by 16 inches, printed broadside. In the upper right corner of the sheet 
provision is made for the entry of the appropriation number and the sheet 
number. Below these the title of the fund is entered. 

Beneath this heading the page is divided vertically into two divisions— 
the left for debits, the right for credits. In the left division the following 
columns are provided: 

Date. 

Items. 

Number. 

Principal. 

Interest. 

The entries made on the debit side are derived from “requisitions of 
disbursing officers, claims and transfer warrants.” 

The right division is provided with columns as follows: 

Date. 

Items. 

Number. 

Principal. 

Interest. 

The entries in these columns are derived from “warrants” issued by 
the Treasury, based on treaties and agreements with Indians for the 
cession of their lands, sales of timber, etc., and interest on the trust funds; 
also from transfers and from Treasury statements of refunds by disbursing 
officers of unexpended balances. If an unexpended balance remains at the 
end of the fiscal year it is carried forward to the account for the ensuing 
year. It is said that the accounts in this ledger are also balanced with the 
Treasury ledgers quarterly. Reports are rendered to the commissioner 
from this ledger when called for. 


SUPPORT, SCHOOL AND MISCELLANEOUS LEDGERS. 

These accounts are contained in ledgers kept in the Finance Division in 
a loose-leaf form, a separate sheet being provided for each fund. Specific 
appropriations are made for the construction of buildings, lighting plants, 
irrigation systems, sewerage systems, etc. By the decision of the comp¬ 
troller such appropriations are treated as continuous appropriations— i. e., 
available for expenditure until the object specified has been achieved—a 
time limit of three years being placed on them for this purpose. That is 
to say, when it is not possible for the Commissioner of Indian Affairs to get 
bids and execute a contract during the fiscal year for which these appro¬ 
priations are made, the authority under which the moneys are expended is 
continued for three years. 

The appropriations for the “support of Indians” are gratuities. They are 
for the support of certain Indian tribes and the maintenance of agencies 
where there are no tribal funds available for the purpose. These appro- 


87 



MUNICIPAL RESEARCH 


priations are annual, and therefore limited to expenditure during the fiscal 
year for which they are made. 

Miscellaneous appropriations include appropriations by Congress for 
surveys, allotment, and classification of lands (practically all of which are 
reimbursable), judgments of the Court of Claims, for the construction of 
bridges, agency buildings, and for sundry miscellaneous purposes, exclusive 
of the appropriations heretofore described. 

The form used for the ledgers mentioned above consists of a sheet 18^2 
by 16 inches in dimension, printed upright. The particulars provided for 
in the form are the same as those enumerated under “Trust fund ledgers” 
above, and with the exception that three columns are provided to show the 
balance of the appropriations for each year to be covered by disbursements 
for the same year, and no interest column is provided, as these funds are 
non-interest bearing. The method of making the entries is the same as 
described in “Trust fund ledgers.” Reports based on these ledgers are 
rendered to the commissioner when called for. 


INDIAN MONEYS LEDGERS. 

Indian moneys accounts are kept in separate ledgers of the Finance 
Division in a bound book, in which there is a page for each agency or 
school. 


TREATY LEDGERS. 

Treaty accounts are kept in separate ledgers in the Finance Division in 
loose-leaf form, a page being provided for each fund. This form is used 
in the following ledgers: “Fulfilling treaties with Indians,” “Indian 
moneys, proceeds of labor,” and “Miscellaneous appropriations.” 

Treaty appropriations are made for the purpose of carrying out agree¬ 
ments with the Indians for the cession of land, etc. Some of these appro¬ 
priations are also derived from receipts from sales of lands under treaty 
provisions. 

The appropriation, “Indian moneys, proceeds of labor,” is money col¬ 
lected by disbursing officers for grazing leases, rights of way, and sales 
of farm products. This money belongs to certain tribes, and it is turned 
into the Treasury at certain periods. 

Warrants are issued and entered in this ledger to the credit of the tribes. 

The ledgers for “Miscellaneous appropriations” include those for survey, 
allotment and classification of lands, judgments of a court of-claims, for 
the construction of bridges, agency buildings, etc. The form used consists 
of a sheet 18^ by 16 inches, printed broadside. In the upper right corner 
of the form provision is made for the entry of the appropriation number 
and sheet number. 

At the top of the form the name of the appropriation is entered. 

Beneath this heading, the form is divided vertically into two divisions, 
the left division for debits, the right division for credits. On the debit side 
in the following columns are provided: 

Date. 

Items. 

No. 

Debits. 


88 




ADMINISTRATION OF THE INDIAN OFFICE 


The entries in these columns are made from auditor’s settlements and 
requisitions for funds to the disbursing officers. 

On the credit side the following columns are provided: 

Date. 

Items. 

No. 

Credits. 

The entries in these columns are derived from appropriation warrants, 
transfers and refunds of unexpended balances. 

It is said these ledgers are balanced quarterly with the Treasury books. 
Reports are made from this ledger to the commissioner when called for. 

Credit Entries 

All moneys appropriated by Congress for Indian purposes, all 
moneys which are to be received for the benefit of the Indians in 
accordance with treaties and agreements—in fact, the receipt of 
all money except “Individual Indian moneys” and its expenditure 
—are recorded in these ledgers. The “Appropriation warrant" is 
the document and instrument which serves as a means of officially 
notifying the Indian Office that there has been appropriated a 
certain sum of money for use in the Indian Service. The appro¬ 
priation warrant properly filled out is the posting means into all 
ledgers. The annual appropriation warrant is received once a 
year, and covers all appropriations provided for by Congress for 
\ operations of the ensuing year. This warrant is received shortly 
after the first of July, and postings are made from it to appro¬ 
priation accounts indicated therein. 

Two warrants are received at the end of each quarter covering 
the proceeds of sales of lands—thus eight of these warrants being 
received in a year. Warrants for all other funds are received 
from time to time, as Congress passes acts covering financial rela¬ 
tions between the Indians and the United States Government. 

Still another form of warrant is the “Transfer and counter 
warrant.” This document serves as a means for making trans¬ 
fers from one fund to another. 

The annual appropriation warrant, which is the one issued an¬ 
nually, is founded upon the appropriation bill passed by Congress. 
All entries which relate to trust funds of various kinds have as 
their foundation either appropriation bills, acts, treaties, or agree¬ 
ments, which are usually of many years’ standing. All entries 
relating to the sale of lands, timber, etc., are founded on similar 
congressional action, but these entries occur more frequently. 


89 





MUNICIPAL RESEARCH 


In cases where an erroneous expenditure has been made from 
any appropriation, the auditor adjusts the same by a transfer 
settlement. 

Deficiencies arising in the settlement of claims by the auditor 
are certified to Congress by the Treasury Department. The 
Treasury prepares transfer and counter warrants; the original 
is retained in the Treasury Department, and the duplicate is 
transmitted to the Indian Office for use of the Finance Division 
of that office. These duplicates are filed in the Office of Indian 
Affairs for future reference. 

Debit Entries in all Ledgers 

Appropriation ledgers are not designed to show expenditures 
actually made in the Indian Service, but advances from the Treas¬ 
ury Department. The total of all debit entries on the general 
appropriation ledgers does not represent the total or actual ex¬ 
penditures for the Indian Service, even if refunds are taken into 
consideration, because of unexpended balances in the hands of 
disbursing officers. The documents which serve as a means for 
posting are: 

(a) The form which is the requisition for funds to be advanced 
to disbursing officers to expend under authorities granted them. The 
requisition, when properly passed and signed by the several repre¬ 
sentatives of departments, sets aside a certain amount of money from 
a specific appropriation which the disbursing officer, or other person 
authorized to expend money, may use for such purposes as have been 
approved under the authorities granted him. He may expend all of 
this money or part thereof. If he expends the entire sum, the entry 
made from the requisition in the general appropriation ledger is the 
entry which is equal to the full expenditure, and which will be sub¬ 
sequently registered in the expenditure cost ledger; but if only 
a portion of the amount set aside by means of the requisition is spent, 
the disbursing officer has under his control a surplus amount of money, 
which he may use for other purposes if the scope of the authority 
permits him to do so. If the authority does not permit him to use 
this money for any other purpose than the one specifically designated, 
it becomes his duty to report a saving on this authority, make a 
deposit in one of the authorized depositories, and report this refund 
in accordance with prescribed procedure. This, however, is at times 
not done by disbursing officers, and then 'the appropriation accounts 
are not credited with refunds. Because of this procedure the general 
ledger accounts show a smaller balance under a given appropriation 
than is actually available for use. Amounts reported as savings are 
carried to the proper ledgers. 

(b) The auditor’s certification of settlement also, serves as a post- 


90 




ADMINISTRATION OF THE INDIAN OFFICE 


ing medium to the general appropriation accounts. These certificates 
represent claims which were settled and paid through the auditor’s 
office. Certain classes of claims are paid by the disbursing clerk of 
the Interior Department which were formerly paid through the 
auditor. When a settlement of a claim is made by the auditor’s office 
that office prepares a certificate for each claim, sends it to the Division 
of Bookkeeping and Warrants of the Treasury (to serve as a means 
for its entries), and transmits a duplicate to the. Finance Division of 
the Indian Office, from which postings are made into the general 
appropriation ledger. 

Entries are also made from Treasury transfer warrants, repre¬ 
senting the contra entries to those made from counter warrants. 


Trial Balances 

At the end of each quarter the Treasury Department sends to 
the Finance Division a printed form which is headed “Balance 
sheet, 191—, Indian ledger of appropriations and expenditures.” 
This form is so arranged that it shows the various titles of ac¬ 
counts vertically, under the following main headings: 

Current and contingent expenses. 

Fulfilling treaties with. 

Trust funds. 

Interest accounts. 

Support of. 

Support of schools. 

Miscellaneous. 

In most instances there are subheadings under each of these, 
and under each subheading there are generally a number of ap¬ 
propriation accounts, either of a general character or relating to 
specific agencies, schools and projects. The sheet is ruled in four 
columns, one headed “Balance to the credit of appropriation,” a 
second “Audited expenditures,” and two are blank. A copy of 
this form, with figures filled in, is sent by the Treasury Depart¬ 
ment to the Finance Division, and this is used to check the gen¬ 
eral appropriation ledger accounts in order to disclose any dis¬ 
crepancies which may have occurred during the quarter. The 
errors are not corrected by journal entry, but correction is made 
by simply erasing the figures of all wrong entries and substituting 
the correct figures. 

The exact classification as to appropriations and accounts which 
are designated as trust funds is not entirely identical in the Treas¬ 
ury Department and the Indian Office. This, however, does not 

91 




MUNICIPAL RESEARCH 


in any way prevent the checking of the balances submitted by the 
Treasury Department against the balances maintained in the gen¬ 
eral appropriation ledgers of the Indian Office. Appropriation 
accounts are maintained in the general ledgers intact for three 
years, when the balances are reported back to the Treasury De¬ 
partment, where they are placed into the surplus fund, from which 
they cannot be used unless reappropriated by Congress. 

On June 30, annually, all three-year balances of annual appro¬ 
priations are turned in. So on June 30, 1913, the balances of 1911 
annual appropriations were returned, and at that time the appro¬ 
priations which remained on the books were for 1912, 19 1 3 an( ^ 
1914. 

Appropriation and Allotment Ledger 

The appropriation and allotment ledger, called the “apportion¬ 
ment ledger,” is maintained for the purpose of providing a record 
of each item of appropriation as passed by Congress, in lump 
sum, and the allotments of amounts from each item to the 
various agencies, schools, or projects to which the item applies. 

This ledger is maintained in the Finance Division of the Indian 
Office. It is loose leaf in form, the leaves being 18 by 1654 inches 
in dimension, printed broadside. Rulings are provided for debits 
and credits, but no columnar headings are printed. Roth the 
debit and credit sides are ruled alike, and provide a column for 
the registration of references, a broad column in which a descrip¬ 
tion of each allotment may be entered, and two columns ruled 
for amounts. 

How Posted 

Postings are made directly from a journal voucher showing the 
allotments. This voucher is 8 by 10 inches in dimension, ruled 
upright, and has the following spaces provided for a general 
heading: 

Finance—Bookkeeping. 

JOURNAL VOUCHER FOR GENERAL APPORTIONMENT NO. —. 

The following entries are authorized: 


Below the general heading are provided a column for date and two 
columns headed “debit” and “credit.” At the bottom of the form is pro- 


92 





ADMINISTRATION OF THE INDIAN OFFICE 


vided space for signature for the principal bookkeeper and spaces for the 
initials of the bookkeepers who actually performed the entries on the 
books. The lower part of the form reads as follows : 


Entered.Entered. 

On the credit side of the apportionment ledger account is entered the 
total item appropriated; on the debit side are entered the allotments in 
detail, showing the distribution of those items to the various agencies, 
schools or projects. The difference between the credit and the debit sides 
represents the reserve which the board of apportionment has retained for 
future allotment. This reserve is not posted, but is carried as a balance 
figure. When, in the course of the year, furthr allotments are made from 
the reserves still remaining undistributed, entry is made on the debit side 
of the ledger in a similar manner. Likewise, when transfers are made 
from one appropriation account to another a credit entry is made under the 
appropriation account which is to be increased and a debit entry is made to 
the account decreased. The apportionment ledger is not balanced or proved 
as to the accuracy of its postings. 

The Allotment and Encumbrance Ledger 

The purpose of the allotment and encumbrance ledger, called 
the "liability ledger,” is to provide a means for recording each 
allotment agreed upon by the board of apportionment, and for 
showing the encumbrances which are made against it. In it are 
also entered changes and adjustments which occur from time to 
time. 

About ten of these liability records are kept in the Finance 
Division of the Indian Office. They are loose leaf in form, being 
sheets 18 by i 6 l / 2 inches in dimension, printed broadside. At 
the top of the form provision is made for entry of the name of 
the school, agency, or project to which allotments are made. Be¬ 
neath this the sheet is ruled in columns, the headings being as 
follows: 

Authorities granted. , 

(Incumbrances against) Annual estimate. 

Modifications—savings (i). 

Charges (2). 

(Incumbrances against) Regular apportionment. 

Balances (3). 

Modifications—savings (4). 

Charges (5). 

Reference. 

Number (6). 

Date (7). 

Legend (description of item) (8). 


93 







MUNICIPAL RESEARCH 


Apportionments (allotment). 

Regular apportionment (9) 

Annual estimate (10). 

Warrants. 

Issued (11). 

Covered (12). 

From this it will be seen that each account, if up to date and 
accurately kept, will at any time show the unencumbered balance * 
of the allotments. The journal voucher is the posting medium 
used to enter the allotments made by the board of apportionment 
against the corresponding appropriation. These allotments are 
posted into columns 9 and 10 of the liability ledger. 

At the beginning of the fiscal year the appropriation accounts 
are credited in column 10 (“Annual estimate’’) with such amounts 
as are allotted to the particular agency or school for purchases 
under contracts against which will be charged contract encum¬ 
brances. In column 9 (“Regular apportionment”) is entered the 
amount which represents the difference between the total appor¬ 
tionment to this agency, school, etc., and the annual estimate set 
aside in column 10. The total of the two columns represents the 
total of the allotment for this agency or school under this appro¬ 
priation. In the adjoining column (8) under “Legend,” notices 
are made of the purposes for which authorities are granted or 
apportionments made. It is supposed to be descriptive, but only 
very short descriptions are given here. Similarly to the appor¬ 
tionments authorities granted are segregated as to those which are 
granted under contracts, “Annual estimate,” and those granted 
from the “Regular apportionment.” Authorities to make expen¬ 
ditures from these- apportionments originate with the disbursing 
officers or other Indian Office administrative division heads. 
After they have been properly approved and passed, these authori¬ 
ties reach the Finance Division, where they are posted into the 
liability ledger under the appropriate account and apportionment 
therein, in subcolumns entitled “charges”—column 2 or 5, as the 
case may be, depending upon the nature of the authority, whether 
it be from an “annual estimate” or a “regular apportionment.” 
In columns 6 and 7, under the general heading “Reference,” the 
number of journal voucher or authority and the date are entered. 
When a saving upon an authority is reported by the disbursing 
officer, the appropriation account allotment is posted in columns 
i or 4. Although this is strictly a credit entry, it is posted on 


94 





ADMINISTRATION OF THE INDIAN OFFICE 


the debit side of the account and acts as a deduction from columns 
2-5, respectively, in order to facilitate deduction and the entry of 
the difference between the two in column 3, which is “Balances.” 

When, upon request of the disbursing officers, or sometimes 
upon demand from the central office, it becomes necessary to mod¬ 
ify an authority already granted so as to provide for an excess 
expenditure over the amount authorized, it becomes necessary to 
record these modifications in the liability ledger, which likewise is 
entered in the column “Modifications-Savings,” columns 1 and 4. 
This is a debit entry. If all modifications were footed and added 
to the total of all items under “Charges” and a deduction were 
made of all items comprising savings, the difference would be the 
balance available under “Regular apportionments.” Under col¬ 
umns 11 and 12 on the credit side of the liability ledger are regis¬ 
tered warrants which were requested under requisitions coming 
from the disbursing officers or other persons authorized to ex¬ 
pend. This entry is made from the requisition itself, about six 
days before the actual issuing of the warrant. 

Cost Ledgers 

The “cost ledgers” are also maintained in the Finance Division 
of the Indian Office. They are designed to show a complete 
analysis of expenditures, by objects (things purchased or used) 
under each allotment for each agency, boarding school, day school, 
survey project, irrigation project, inspection service or other mis¬ 
cellaneous work. There are eight of these books, seven for regular 
agencies and schools and one for irrigation, allotment, survey, and 
miscellaneous charges. The form used is loose leaf, 22^4 by 18 
inches, printed broadside. At the top of each sheet are the fol¬ 
lowing printed headings: 

Agency, school or project. 

Appropriation. 

Page. 

Beneath these headings the form is ruled in columns, the head¬ 
ings of which are as follows : 

Date. 

Account of claim. 

Salaries, wages, etc. 

Traveling expenses. 

Transportation of supplies. 

Heat, light and power. 


95 



MUNICIPAL RESEARCH 


Service: Communication service, printing, binding, advertising, etc. 

Subsistence supplies. 

Dry goods, wearing apparel, etc. 

Forage. 

Fuel, illumination, lubricants, etc. 

Stationery and office supplies. 

Educational supplies. 

Medical supplies. 

Equipment material, etc. 

Construction. 

Repairs : Labor and material. 

Rent. 

Miscellaneous. 

Total. 

The cost ledgers maintained in the Finance Division carry only 
■such accounts as deal with the expenditures made for the field ser¬ 
vice. Expenditures of disbursing agents and others who are in 
the field are accounted for through this cost ledger, but expen¬ 
ditures incident to the conducting of the business of the Indian 
Office are not made a part of this record, except such expenses 
as tolls on telegraph and telephone messages sent and received 
by the office and the salaries of a few employees not paid from 
the allotments from items in the legislative bill. In other words, 
these “cost ledgers” embrace analyses of expenditures from ap¬ 
propriations made for the Indian field service only. 

iClassification by Ledger Sheets 

By arrangement of the loose-leaf cost-ledger sheets, the cost ledgers 
are self-indexing, in so far as they relate to the main classification which 
divides the eight cost ledgers into sections. These ledger sections and their 
subdivisions are: 

.Agency and Support of Indian Section 

All agencies, no matter where located geographically, are brought to¬ 
gether into this section by alphabetical arrangement. Each agency has 
allotted to it as many loose leaves as there are different allotments or 
appropriation items affecting it. 

Jn the Boarding-School Section 

All boarding schools, no matter where located geographically, are brought 
together into this section by alphabetical arrangement. Each boarding 
school has as many sheets as there are allotments or items of appropriation 
applicable. 

The Day-School Section 

All day schools, no matter where located geographically, are brought 
together in this section by alphabetical arrangements. Each day school is 


96 



ADMINISTRATION OF THE INDIAN OFFICE 


allotted as many sheets as it has different allotments or items of appro¬ 
priation applicable. 

The Allotment and Survey Section 

The sheets are arranged alphabetically by the name of the reservation 
where the allotment of lands and survey work is being performed, re¬ 
gardless of its geographical position. Under each reservation there are 
as many sheets as there are allotments or items of appropriation. However, 
there is seldom needed more than one sheet for each. 

The Irrigation Section 

Each reservation on which irrigation work is carried on has as many 
sheets as there are allotments or items of appropriation applicable. There 
are few for which more than one sheet is needed. 

The Miscellaneous Section 

The miscellaneous section combines all the functions for which a sepa¬ 
rate section is not provided. They may be such as extend over the entire 
service or are of minor importance and not frequently occurring. Some 
of the sheets representing these functions may have to do with only a few 
reservations or in some cases with a single reservation. The main classi¬ 
fications are: 

1. Attorneys' and counsel’s fees. 

2. Catholic mission schools. 

3. Five tribes. 

4. Five tribes’ schools, general supervision. 

5. Inspection, special agents. 

6. Supervision of schools. 

7. Construction (which covers supervisors of construction). 

8. Industries (which cover general officers and employees super¬ 
vising agricultural and industrial work). 

9. Health inspection (which includes general health supervision 
officers). 

10. Warehouse inspection and advertising of supplies, etc. 

11. Suppression of liquor traffic. 

12. Miscellaneous timber expenses (which include general super¬ 
vision of forestry work). 

13. Sundries. (Into this fall such items as can not readily be 
classified under any of the above specially set up appropriations or 
classifications.) Information entered here relates to: 

(a) Telephone and telegraph service of the main Indian office. 

( b ) Expenses of particular Indian commissions. 

(c) Other similar and incidental expenses. 

Any of the above 13 sub-sections of the miscellaneous section of the cost 
ledgers may have as many loose-leaf sheets as there are allotments or 
items of appropriation applicable. 

Difference in Use as Compared zvith Allotment Ledger 

Since, by congressional action, there have been established many lump- 


97 




MUNICIPAL RESEARCH 


sum items of appropriation, each one of which is for a specific function 
of the whole Indian Service, allotments may be made from each item 
to nearly every reservation. Therefore, the title of a single item of 
appropriation may be found on as many loose-leaf cost-ledger sheets as 
there are agencies, schools, day schools, boarding schools, etc. There are 
approximately as many sheets as may be found in the allotment and 
encumbrance ledger (“Liability ledger”), but the sheets are differently 
arranged and the columnar analysis shows expenditures by objects. 

Postings to Cost Ledgers 

The entries, however, are made from a different source, viz., from 
claims prepared by the claim section and from quarterly accounts ren¬ 
dered by the various disbursing officers. Each claim and each supporting 
voucher attached to the disbursing officer's accounts current is analyzed, 
and the several items are as charges under the appropriate allotment or 
appropriation item, the amount being distributed in columns. The quar¬ 
terly accounts are so prepared that they are already classified and analyzed 
by appropriations, with the result that the cost clerk posts direct from 
these statements. The quarterly accounts are not entered in the cost 
ledgers until they are examined by the account section of the Finance 
Division. The posting, therefore, differs from the amounts of the claims 
rendered by the amounts of the adjustments. 

Method of Detecting Errors 

There is no means for proving the accuracy of the postings by trial 
balance. Errors, therefore, are discovered only as a matter of chance or 
by detailed checking. If, in the course of the work, the cost clerk notices 
that a wrong account or column has been posted, this may be corrected. 
So, too, if it be discovered that a wrong charge has been made on the 
abstract of disbursements, this is sent back to the account section for a 
supplemental examination, although this is not strictly considered a part 
of the duties of the cost ledger clerk. The general rule is that anyone, 
be it his special assigned duty or not, shall call to the attention of those 
responsible any errors or mistakes which come to his notice. Because of 
the present procedure, the Auditor for the Interior Department may make 
changes and adjustments either at the suggestion of the account section 
of the Finance Division, or of his own accord, and because the Auditor 
does not systematically send notice to the Finance Division of changes 
made, the cost ledger clerk does not receive all adjustments. He receives 
all adjustments with regard to claims and makes the necessary changes 
on the books. 

Adjustments to be made on claims may be brought to the attention of 
the cost ledger clerk by checking the entries made in the cost ledger 
against the entries made in the general appropriation ledger. The general 
appropriation ledger clerk also receives from the Treasury Department 
certificates of settlement, upon which are shown, by appropriation ac¬ 
counts, the amounts of claims liquidated through the Treasury Depart¬ 
ment upon the Auditor’s certification. Usually there is a certificate for 
each claim. These items are posted into the general appropriation ledger 
to the respective accounts. Periodically the cost ledger clerk checks the 




ADMINISTRATION OF THE INDIAN OFFICE 


various claim accounts of the general ledger and the accounts as shown 
in his cost ledger in the total columns and ascertains that no differences 
exist between the two books, or if he ascertains that a difference does 
exist, he makes the necessary inquiry, changes, and adjustments. This is 
true of all claims except those for railroad freight paid from the appro¬ 
priation, “Purchase and transportation of Indian supplies.” Items are 
charged to the fiscal year during which they are incurred or of which they 
are a liability, and not necessarily to the year in which they are paid. 
An index is kept showing at what agencies and schools expenditures from 
each fund are found, and when the fourth quarter of the accounts has 
been entered the books are footed up and summarized. 


99 




CHAPTER X 


METHODS OF EXAMINATION AND AUDIT 

The audit of transactions of the Indian Service is carried on by 
the Auditor for the Interior Department, whose office is a part of 
the Treasury Department. In this a separate division has been 
established which passes on all vouchers and accounts dealing 
with Indian matters. The audit by the Treasury Department, 
however, is based on certification of persons in the Indian Service. 
The certification is done by the person in charge of the superin¬ 
tendency or administrative unit in which the transaction takes 
place. This is followed by an examination in the Finance Di¬ 
vision of the Indian Office. For the purpose of administrative 
examination two sections have been created in this division; one, 
called the “accounts section,” handles the accounts current of the 
Indian Office—i. e., the receipts and ’disbursements of Indian 
agents; the other, called the “claims section,” handles the vouchers 
which are to be paid by Treasury warrant direct. 

Examination and Audit of Accounts Current 

The purpose of examining quarterly accounts current of dis¬ 
bursing officers in the Finance Division is to give to the returns a 
central office review and certification before sending them to the 
Auditor for the Interior Department. 

Authority Vested in the Examiners 

The examiners attached to the Finance Division have no 
authority to allow or disallow any items reported by the disbursing 
officers in their quarterly accounts current. They may question 
and make the necessary memoranda on the abstracts of disburse¬ 
ments, duplicate copy, but they may not change, erase, or cancel 
any figures or items, make transfers, etc., on any statements or 
vouchers submitted by the disbursing officers. In making theii 
examinations they are vested only with the authority to verify,, 
audit, and examine the accounts and call the attention of the 
Auditor for the Interior Department to such discrepancies and to 
such items of difference which in their opinion should be adjusted 
or canceled. 


ioo 


ADMINISTRATION OF THE INDIAN OFFICE 


Certificate of Administrative Examination 

There is no formal statement to which the examiner who makes 
the administrative examination certifies. When he has completed 
his examination he prepares a memorandum of exceptions, if he 
has any to note. He is held responsible for the faithful perform¬ 
ance of his work through initialing for identification. 


Procedure of Administrative Examination 

Upon receipt of the quarterly accounts current in the Mails and 
Files Division, each is given a mail and files office number, and has 
attached to it the usual transfer or mail distribution card. The 
quarterly accounts current are then transmitted to the filing sec¬ 
tion connected with the Finance Division, where the accounts are 
given a Finance Division office number consecutively, a new series 
being given each quarter from i up. The accounts current are 
examined so far as practicable in the order in which they are num¬ 
bered. After receiving the accounts current the Auditor for the 
Interior Department is given a list or a schedule from time to 
time showing the date of sending from the field disbursing officer 
and the date of receipt in the central office. This is done in order 
to show the Auditor whether or not a delinquency exists in the 
rendering of any accounts to the Indian Office. The law does not 
permit the quarterly accounts to remain in the Indian Office for 
examination longer than 60 days, and should an account not be 
transferred by the Indian Office to the Auditor’s office for the In- 
Terior Department, the request for the removal of such a delin¬ 
quency would have to be forwarded through the Secretary of the 
Interior to the President, who alone has the right to remove such 
delinquency. The method of examination of these accounts is 
clearly defined in rules prescribed by the head of the account sec¬ 
tion of the Finance Division of the Indian Office. At the present 
time the rules governing each examiner are as follows: 


Method of Handling Papers, Etc., in Examining Cash Accounts, and 
Important Points To Be Observed by Examiners 

1. The file clerk issues the account to be examined, together with the pre¬ 

vious account, including the account current, check approvals, if any, 
and the “memoranda.” 

2. The examiner obtains the exceptions to previous account, and also the 

“memoranda of authorities.” from bookkeeping section. 

IOI 



MUNICIPAL RESEARCH 


3. The examiner checks the account current (form 5-1153) as follows: 

a. The period for which rendered. 

b. The balances on hand first of quarter with balances as shown by 

the memorandum account current for the previous quarter, 
checking each appropriation “head” and each amount there¬ 
under. 

c. The date of bond with date shown on the carbon copy of requi¬ 

sition for funds. 

d. The advances during the quarter from the treasury as shown 

by the carbon copy of requisitions on hie , checking amounts 
under each appropriation or fund , and seeing that they are 
stated exactly as shown in requisition and checking the requi¬ 
sition with red pencil. 

£. The signature of superintendent and signature and seal of 
notary public. If the account is “certified on honor,” seeing 
that copy of authority therefor is attached to the account cur¬ 
rent. 

/. The analysis of balance with subsidiary cash and net balances in 
depositaries. Seeing that total outstanding checks, amount in 
each depositary, and net balance are shown. 

(/. That first endorsement is dated and signed by the disbursing 
ofheer. 

h. The expenditures paid in cash as shown by subsidiary cash 

account with vouchers. 

i. Seeing that the proceeds of all trust fund, beneht , etc., warrants, 

where the amounts are to be accounted for by the superin¬ 
tendent, as shown by carbon copies of Auditor’s settlements in 
memorandum file, are taken up on the voucher for miscel¬ 
laneous individual Indian money, or charged within ninety 
days of date of settlement. 

j. The columns for individual Indian moneys, and seeing that they 

are grouped together on the account current.and abstract of 
disbursements. 

The vouchers with abstract of disbursements are as follows: 

(1) In general: 

A. All vouchers must show date and file number of authorities for 
expenditures consisting of either— 

a. For regular salary lists—see instructions as to pay-roll 

vouchers. * 

b. For advance authorities—see instructions as to sundry 

classes of vouchers. 

c. Approvals of indebtedness —checking and placing both 

original and memorandum authority with memoran¬ 
dum voucher, and making slip to attach to original 
voucher, unless authority covers labor, in which case 
sending original authority with original voucher. 


102 





ADMINISTRATION OF THE INDIAN OFFICE 


d. Sections 287, 291, regulations, 1904, as amended— 

In all cases comparing the expenditures as shown by 
the vouchers and the appropriations as shown on the 
abstract of disbursements with the appropriations 
shown by the authorities. If the charges are not 
made on the abstract in accordance with the authori¬ 
ties granted, and there is time before the close of 
the fiscal year, requiring the superintendent to make 
correction in the following quarter by debiting the 
proper appropriation and crediting the one from 
which the payment was erroneously made, and show¬ 
ing the correct charge on the memorandum account 
current and abstract of disbursements. If too late 
in the fiscal year to do as above outlined, merely 
calling attention to the error and correcting mem¬ 
orandum account current and abstract of disburse¬ 
ments as above indicated, the Auditor’s office in the 
latter case making the necessary debits and credits. 

e. Where there is any question as to the charge to be 

made against an authority, either in connection with 
the regular vouchers or individual Indian money 
vouchers, the examiner makes the entry, followed by 

the words “See exception . quarter, 19. 

The necessary exception is taken and, when satisfac¬ 
torily answered, the clerk removing the exception 
corrects the entry, if necessary. 

/. Where a single authority carries separate amounts for 
specific items, all payable from the same appropria¬ 
tion, e. g., $200 for repairing school buildings, $300 
for building school fences, $600 for plastering dor¬ 
mitory, $50 for carpenter labor, and $25 for brick 
and stone mason, etc., then the first examiner making 
charges against the authority must divide the space 
allowed for entries so as to group the charges for 
each specific item together. Succeeding examiners 
will then make entries separately for each item until 
* the amount therefor is exhausted. 
g. All expenditures must be evidenced by receipts unless 
payment is made by the official check of the superin¬ 
tendent, which when paid goes to the Treasury De¬ 
partment and operates as a receipt. The voucher 
must show check number, date, amount of check, to 
whose order drawn, and depositary on which drawn. 
If paid in cash, amount must be checked in the sub¬ 
sidiary cash account by the examiners. 

Certificate as to correctness of vouchers showing payments to 
Indians for purchases from them are required, ever, though pay¬ 
ment is made by check. They are obtained by having the Indians 
sign the roll as if receipting for payment. 








MUNICIPAL RESEARCH 


4. Purchase vouchers (not made from Indians) are checked as follows: 

a. The signature of claimant with name shown at head of voucher. 

b. The certificate of employees showing receipt of goods, etc. 

c. Noting date of check to see that no advance payments are made. 

d. The certificate of superintendent. 

e. The date and number of the authority. 

f. The purpose for which purchased. 

g. The method of purchase. 

h. The number, date, and amount of check as stated, and seeing 

that the amount agrees with total of voucher. 

i. The items purchased with abstracts A and B of property ac¬ 

count. If the supplies purchased are not taken up in prop¬ 
erty account, but are expended on purchase voucher, seeing 
that proper certificate of expenditure by an employee is filed 
with the voucher. 

Expendable property other than subsistence supplies purchased in open 
market and expended in the quarter in which paid for, need not be taken 
up in the property account, provided a certificate signed by the employee 
under whose supervision the property is expended is placed on the pur¬ 
chase voucher. 

See section 453, Regulations 1904. 

/. Authority for expenditure. The original authority must be 
attached to the voucher and referred to thereon by number 
and date. If previously submitted, the voucher with which 
filed must be stated. Enter on memorandum of authorities 
the amounts expended as shown by the voucher. If more 
than one authority is cited, see that the amount expended 
under each is stated. 

k. If for purchase of supplies an amount of purchase at any one 
time exceeds in the aggregate $500, at least three weeks’ pub¬ 
lic notice by advertisement must be shown unless— 

(1) An exigency is declared by the Secretary, which will 

appear in the authority, which must also be signed by 
him, and must not exceed $3,000. 

(2) Or the supplies, contracts, or labors are for irrigation 

works and do not exceed $5,000 (35 Stat. L., 71). 

5. Traveling expenses—Voucher Form 5~335d : 

a. The purpose for which trip is made must be specifically stated. 

See circular 759. 

b. Sub-vouchers Form 5-927 must be furnished for all payments 

amounting to more than $1 except— 

(1) Railroad fares. 

(2) Sleeping-car fares. 

(3) Meals without lodging, when itemized separately. The 

exact days and whether for supper, lodging, break¬ 
fast, or dinner, must be stated on the voucher. 


104 




ADMINISTRATION OF THE INDIAN OFFICE 


c. Affidavits may be verified before superintendent or clerk desig¬ 

nated by the Secretary of the Interior to administer oaths to 
traveling expenses. See circulars 680 and 696. 

d. Checking details of check making payment. 

c. When for pupils, the names and ages must be stated in each 
instance. For others, names and necessity for paying their 
expenses should be shown. 

/. Making charges against authority. Carefully noting the reading 
of the authority to see that all expenses are properly charge¬ 
able to it. 

g. Expenses must be fully itemized on the voucher as well as on 
sub-vouchers. 

6. Miscellaneous voucher (Form 5~335a) : 

a. Checking authorities, certificates and details of check covering 

payment, same as for purchase vouchers. 

b. Receipts for prepaid express or freight must always be fur¬ 

nished and the number, etc., of voucher showing purchase of 
articles transported must be stated. 

c. The rule as to competition applies. 

d. Deeds for purchase of land must be filed with voucher. 

e. If the service is a continuing one, an informal agreement -on 

Form 5-086 must be attached to the original voucher or re¬ 
ferred to thereon. Note on memoranda of authority, the 
number, etc., of the voucher to which agreement is attached, 
if any. 

7. Pay-roll of Indian freighters (Form 5-334) : 

Vouchers for transportation by Indians must be supported by bills 
of lading signed by each freighter. If the old form of voucher 
is used, the words “without package numbers” should be stricken 
from the certificate of weigher before signing. 

8. Making certificate on Form 5-167 and attaching to abstract A of prop¬ 

erty account. The examiner should enter all items of property not 
taken up or expended on proper certificate and sign the certificate. 

9. Computing totals for each appropriation on abstract of disbursements 

and check amount carried forward to account current, after making 
any necessary corrections. 

10. To fill out indorsement on back of original abstract of disbursements 

showing total amount chargeable to each appropriation or fund, and 
placing his initial and the date on line showing footings on last 
page of memorandum abstract and see that the correct disburse¬ 
ments under each appropriation and fund are shown on the mem¬ 
orandum account current. 

11. To check over all matters in the memorandum file relating to the 

account, and remove therefrom all letters, etc., which do not con¬ 
cern future examinations. Papers which are to be “dead” filed 
should be so marked when removed from the memorandum folder 
and turned into the file clerk. 


105 






MUNICIPAL RESEARCH 


(A) Pay-roll of employees (Form 5-330) : 

a. To check each employee with cards in education di¬ 

vision as to— 

Name. 

Period of service. 

Salary. 

Leave without pay, etc. 

b. To compute number of months and days of service and 

check same on the roll. (See Treasury Circular No. 
67.) To see that the exact number of months or 
days for which payment is made is given. 

c. Authorities for irregular employees should be handled 

in the same manner as those for purchases, except 
that the original authority must remain with the 
original voucher. 

d. To check positions paid as stated on the roll with those 

authorized, and the salaries thereof and appropria¬ 
tions from which paid as shown by salary list in edu¬ 
cation division. 

e. To compute total charge against each appropriation, 

both for the regular and irregular employees, and see 
that superintendent’s recapitulation of same on last 
page of pay-roll is correct. 

f. To see that check number, amount, and date of each 

check are given, or that the receipts for cash pay¬ 
ments are attached. 

g. To see that roll is signed by superintendent and sworn 

to, with notary’s signature and sealed in proper form. 

h. To make certificate as to regular employees on back of 

roll, both on original and memorandum, and have 
same signed by the chief of division. 

i. To require that periods of service be specifically stated 

and discourage the use of “ditto” marks. 

(A) Annuity pay-rolls (Form 5-322) : 

a. To check names with former rolls or with approved 

rolls, comparing year of birth, sex, and relationship, 
and notations of trust fund settlements. 

b. As to new enrollments to see that date of birth is given. 

(No new enrollments are allowed at the Osage 
Agency, but payments are made to the heirs of a 
deceased Indian.) 

c. As to transfers, to check on former roll by number 

given in first column of present roll. 

d. As to deaths, to make check on former roll when 

omitted from present roll, and after completing 
checking the roll, go over former roll, looking at 
deaths reported to see that no such names are car- 
carried forward to new roll. One payment after 
death is allowed from each class of funds. 

106 




ADMINISTRATION OF THE INDIAN OFFICE 


e. To check certificates of head men, etc., with the roll 

(for payments to others, taking care of minors and 
incompetents). 

f. To check roll as to items covered by superintendent’s 

certificate. 

g. To see that shares of deceased persons are deposited 

to the credit of their estate unless heirs have been 
determined, in which case the office file number and 
date of findings must be given in ‘‘remarks” column. 

h. To see that names of persons to whose order checks 

are drawn are shown on roll and that check numbers 
and dates of checks are given. 

i. To examine amounts paid and data as to check drawn, 

or signatures, if paid in cash. 

/. If the payment is a special one and special instructions 
have been issued therefor, to see that such instruc¬ 
tions are observed. 

k. To compare total amount paid with abstract of dis¬ 
bursements and the appropriations authorized; 
making entry on the memorandum of authority 
showing the amount paid, etc. 

(t) When shares are deposited in bank to the 
credit of the Indians, to see that the bank 
account numbers are shown in the “re¬ 
marks” column on the roll opposite each 
amount deposited, and that the schedule at 
the end of the roll, giving the names, num¬ 
bers, amount deposited, and number in 
bank of each item is filled out; also, to see 
that the aggregate of such deposits ap¬ 
pears on a separate line on the debit side 
of the account current under the various 
funds or appropriations as a “transfer to 
bank accounts” instead of being included 
with the amounts actually paid to Indians 
(however, total of the deposits and the 
amounts paid direct to Indians should be 
carried to abstract of disbursements under 
the proper headings) ; also, to see that an¬ 
nuity roll numbers appear in the “remarks” 
column of the abstract of bank accounts 
opposite each account deposited. 

(B) Land sales roll (Form 5-319) : 

a. To verify balances brought forward. 

b. To pay no attention to the “received” column except 

to see that the proceeds of all cash sales which have 
been approved three months or more, and that within 
32 days after they fall due all notes and interest pay¬ 
ments shown by liability cards, Form 5 _ 4 ° 3 > are c °l" 


107 





MUNICIPAL RESEARCH 


lected and the amounts. taken up. If not taken up. 
exception should be taken, and that fact noted on the 
copy of approval of sale or the liability card, as the 
case may be. 

c. To check very carefully the “deposited to credit of In¬ 

dians” and “paid direct to Indians” columns. In 
every case refer to the authority or the liability card, 
as may be proper. 

d. If a copy of the approval of the sale is not in the tem¬ 

porary land-sale file, to send to the general files for it. 

e. Liability cards, Form 5-403, one of which there should 

be for every sale made under deferred payments, will 
be placed in the temporary land-sales file as they are 
received. They should be kept in this file until the 
sale has been approved, when the date of the ap¬ 
proval and the authority number of the approval 
should be indorsed thereon. They should then be 
placed by the examiner in the permanent liability card 
land-sale file. The purchaser is not required to pay 
any interest accruing prior to the date of the ap¬ 
proval of sale. 

/. When a sale is made under deferred payments and there 
is no liability card, Form 5-403, in the temporary or 
permanent file (both should be consulted), a dummy 
should be placed in the permanent file and a card 
called for in the exceptions. This dummy should 
give every material fact which can be ascertained, 
and should show that the original card was called for, 
followed by the date and the examiner’s initials. 

(1) As soon as all the proceeds of a cash sale 

have been cleared from the land-sales roll 
the copy of the approval should (unless it 
carries with it an authority for further pay¬ 
ments) be marked conspicuously as “dead” 
and sent to the file room. 

(2) If the approval also authorizes disbursements, 

after deposit of the proceeds, an abstract of 
such authority on Form 5-i39a (pink) 
should be made for each heir and fastened 
to the face of the copy of the approval, for 
file with the bank account authorities. All 
amounts paid from the proceeds under such 
authority will then be recorded on said pink 
sheet. 

(3) In case of a sale under deferred payments, 

as soon as the original or dummy liability 
card has been indorsed with the date of ap¬ 
proval and placed in the permanent file, the 
temporary file should be cleared as above 
indicated. 

108 



ADMINISTRATION OF THE INDIAN OFFICE 


h. When part of the proceeds are transferred to another 

schools, and the approval also grants authority for 
payment to the Indian, form 5-i3Qa should be made 
out and attached to the face of approval as above in¬ 
structed, but marked plainly with the name of the 
school to which the funds are transferred, sending 
same to the file room separately for filing with the bank 
authorities for said school. 

i. If deposits are returned to bidders by checks, the check 

numbers must be appropriately cited, and if returned 
in cash, a cash receipt should be furnished. 

]. To check totals of amounts on hand at beginning and 
close of quarter; amounts received; amounts de¬ 
posited; amounts paid direct to Indians; amounts re¬ 
turned to bidders; amounts transferred to other 
schools, etc., with account current. Make transfer 
slips, unless already in memorandum folder, for all 
amounts transferred to other schools. 

k. To see that all money received for the purchase of land 
is taken up on the account current under “special de¬ 
posits” and held there until after official notice has 
been received of the action of the department, and to 
see that all proceeds of such sales shown on voucher 
as on hand at the end of quarter are carried in the 
column “deposits with bids.” 

Proceeds of sales of timber should be shown as 
“individual Indian money timber sales” on the ac¬ 
count current, and on the roll in the column “De¬ 
posit with bids” if on hand at beginning or close of 
quarter. 

/. The name of each Indian must be shown, the amount on 
hand first of quarter belonging to each, the amount 
received for each, the amount paid to or deposited to 
the credit of each, and the amount on hand at end 
of quarter belonging to each. To see that the pro¬ 
ceeds on hand are dropped from the land and timber 
sales voucher, if the sale has been approved by pay¬ 
ment to the grantors under proper authority, or by 
deposit to their credit in banks taking same up on 
abstract of bank accounts. Should a grantor be dead 
and his heirs undetermined, the proceeds should be 
deposited to the credit of his estate in order that they 
may draw interest. If any balance in connection with 
an approved sale in excess of $10 is carried at end of 
period to require the superintendent to make a spe¬ 
cial explanation. 

m. Some of the sales made at Seneca and Kaw come under 
special regulations, which must be consulted in check¬ 
ing up. 


109 




MUNICIPAL RESEARCH 


(C) Rentals on allotments (agricultural), Form 5-286. 

a. To check amounts on hand first of quarter with former 

roll. 

b. To get liability cards from hie room and to check 

amounts received during quarter with said cards, 
making entry of the quarter in which the amounts 
are taken up. To see that each share is shown cor¬ 
rectly where more than one person shares in the 
rental, and note exception on cards, if exception is 
taken. If no card can be located, to make a dummy 
card and take exception, asking for hie number of 
office approval of lease and require a card, unless it 
has previously been furnished, in which case the date 
it was submitted must be stated. 

c. To check schedule of deposits with amounts shown as 

deposited in column “deposited to credit of Indians.” 
To see that said schedule shows both the lease num¬ 
ber and the bank account number. To check amounts 
paid direct and see that sections 33 to 38, regulations 
of 1913 are complied with. See that each lease shows 
that correct balance at end of quarter. 

d. To check total amount received with abstract miscel¬ 

laneous funds. Check total amount paid to Indians 
with account current and abstract of disbursements. 

e. The file number of departmental approval of heirship 

findings must be cited for all payments made direct to 
heirs who are not shown on cards. Whenever the 
names of the additional heirs are approved they must 
be entered on the liability card and the authority 
number and date must be inserted on the card by the 
examiner. 

f. If no lease roll is with the account, to examine former 

account and the card records to see if there are any 
leases. 

g. Year of birth of each lessor should be given. 

h. To make transfer slips (if not. alread in folder) for all 

amounts transferred to other schools. 

i. To see also regulations of July 14, 1913. Rentals on 

allotments (mining). See sample account and in¬ 
structions on forms 5 _I 54^ (final sheet). 

Miscellaneous Indizndual Indian Money 
(See instructions on form 5-i40a, and regulations of July 14, 1913.) 

To make transfer slips (if not already in memorandum folder) for all 
amounts received from or sent to other schools. 

(D) Abstract of bank accounts. 

a. Not to check balances on hand first of quarter. 

b. To check deposits with schedules attached to land sales, 

annuity, lease, miscellaneous individual Indian money, 


no 



ADMINISTRATION OF THE INDIAN OFFICE 


and royalty rolls (form 5-1540) and with schedule at 
end of annuity roll. To consult sample account on 
reverse of form 5-i29a. 

c. To compare the authorities found in files and note on 

the authorities in the proper column therefor the 
amounts expended as shown by the checks, and when¬ 
ever an authority is exhausted, to mark it “exhausted” 
and place it in the file of exhausted authorities. 

d. To check the total amount of checks drawn with the 

abstract of disbursements. 

c. To see that a recapitulation and analysis are made on 
form 129a. 

/. To make transfer slips (unless already in the memo¬ 
randum folder) for all amounts transferred to other 
schools. 

<7. See regulations of July 14, 1913. 

Examining Vouchers for Receipts by Disbursing Officers. 

Although the rules prescribe that an examination shall be made 
of all receipts of money by disbursing officers, the records which 
are available in the Office of Indian Affairs which may be used 
as a basis for verification are -so meager that the examiner is un¬ 
able to make the examination with any degree of efficiency. The 
Indian Office has no means of telling how much money each dis¬ 
bursing agent has on hand which he has collected from “miscel¬ 
laneous” sources, except as reported by him in his account current, 
which is submitted quarterly. Some “miscellaneous receipts” 
lend themselves to a meager check; others can not be verified at 
all be examiners in the central office. It is quite possible for the 
disbursing officer to grant permits for various purposes for which 
payment is to be made to him. The amount of these permits is 
determined frequently from the quantity of service performed. 
It only requires an incorrect reporting of quantity of service per¬ 
formed to enable the officer to falsify his account and no further 
examination can be made of the amount received by the disbursing 
officer except in so far as a false return may be detected by special 
agents in the field. 

Methods of Examining Property Accounts 
The rules prescribe that the disbursing officers must report property re¬ 
ceived on a property return. But, as in case of the examination of the 
miscellaneous receipts, there is little or no means provided for checking the 
accuracy of these property returns. The Office of Indian Affairs is only 
aware of the fact that the disbursing officer has received the article or 


hi 





MUNICIPAL RESEARCH 


articles in question when he reports the fact on “Abstract A” on his 
property account. If articles are purchased and paid for through the 
Indian Office, invoices are checked against “Abstract B” of his property 
account; and if all the articles named in such an invoice are taken up on 
the abstract, the invoice is approved, and the transactions, so far as the 
purchase is concerned, is closed. The amount of the property remaining 
on hand at the close of a quarter is not checked to the property return 
for the next succeeding quarter. Nor if it were so checked would it 
prove anything except the reporting skill of the officer. The checking 
of one return with another is only done where it is a final return under a 
bond or the final return of a disbursing officer, because in that case the 
successor to the retiring disbursing officer is required to prepare a certifi¬ 
cate showing what properties he has taken over. At no time is there a 
definite inventory prepared, at least not an official inventory. The dis¬ 
bursing officers, when they make an accounting, for self-protection some¬ 
times prepare an inventory, but this is not required. The office of Indian 
Affairs has no record, and, therefore, the examiners in checking the 
property returns have little or no means whereby they can verify the cor¬ 
rectness and accuracy of the property returns provided. 

Examination of Claims to be Paid by Treasury 

The accounts against the Government that are to be sent to the Treasury 
for payment are called “claims” as distinguished from those paid by the 
disbursing officer. Claims are divided into three main classes: 

1. “Supply claims,” which cover all the supplies which are bought on 
annual estimates, and “miscellaneous claims,” known as open-market 
purchases, which are made from time to time to supplement the annual 
estimates under “authority C.” 

2. “Annuity and trust claims,” or those made by individual Indians for 
hack annuity and shares of trust funds belonging to the tribe. 

3. “Railroad transportation claims,” which include those for both freight 
and passenger service. 

Supply Claims 

Supply claims are divided into two main groups—claims which cover 
supplies bought on annual estimates, and miscellaneous open-market pur¬ 
chases. These latter claims cover claims for advertising, building claims, 
school claims, telegraph refunds, and transfer claims. 

Under Annual Estimates 

Supply claims which cover supplies purchased on annual estimates are 
transmitted to the home office from warehouses in the Indian Service 
These warehouses are located at Chicago, New York, St. Louis, Omaha 
and San Francisco, respectively. Supplies on annual estimates are bought 
under contract duly advertised, copies of which, after execution, are placed 
on file in the claim section of the finance division. These contracts are 
given serial numbers and filed in that order. 

Purchases are made on requisition by the warehouses. When supplies 
are delivered, they are accompanied by a prescribed form of Government 
voucher an original and two copies. The warehouseman certifies on the 
voucher the fact that the goods have been received, and the inspector 




ADMINISTRATION OF THE INDIAN OFFICE 


certifies that they are in accordance with the requirements of the contract. 
The original and one copy of the voucher are transmitted to the central 
office. The voucher is received by the mails and filing section and indexed 
as a claim. It is given a serial claim number, which, with a brief descrip¬ 
tion of the subject matter, is typed on slips in accordance with the general 
filing system of the claim section. Three slips are made. One slip is pre¬ 
pared and filed away under the name of the contractor, another under the 
claim serial number, and if the contract pertains and relates to some special 
school or agency, it is filed under that school or agency. When a claim 
relates to a number of schools or agencies, a separate slip is not filed 
under each of the schools and agencies mentioned. It is then considered 
as a claim for the entire service. 

The filing system provided in the claim section also includes a ledger 
record for each contractor. All claims of the same contractor are listed, 
with the amount of each claim, and the action taken thereon is indicated 
opposite each claim number under the contractor’s name. In order that no 
discrimination be made between the amount of work involved in the ex¬ 
amination of claims, the examiners are required to take up the claims in 
the order in which the claims are numbered. 


Examination of Contract Claims 

The examiner separates the duplicate of the invoice from the original 
and checks the original invoice with the contract to see that the prices as 
stated are correct. He then checks the invoice with the schedule. By 
checking against this schedule the amounts set aside by the bookkeeper to 
meet the payments on these contracts are verified. 

After the examiner has checked the invoice, he arranges the invoices 
in order of the appropriations, to meet the requirements of the Treasury 
Department as indicated in the schedule which the Treasury Department 
furnishes. He then dictates his claim, and it is written on a form letter 
for transmittal, with the schedule attached. This schedule shows the nairu 
of each Indian school or agency involved under the appropriation to b< 
charged, and opposite the name of the school or agency the amount 
chargeable to each is shown. These amounts are aggregated and the total 
amount chargeable to each appropriation is brought out. The total of the 
schedule is carried forward to the face of the sheet which transmits the 
claim and shows the total amount to be paid. 

After the examiner has finished the verification of a claim, he transmits 
it to the chief of the claim section for review. If found correct, it is passed 
on to the ledger keepers, who enter the amount as shown on the claim 
against each appropriation. It then is transmitted to the cost ledger clerk, 
who enters the amount under each appropriation, grouping the entries by 
schools, agencies, etc., and with a further sub-classification by the item? 
of expenditure under each subhead. The claim, when so entered, is trans¬ 
mitted to the chief of the Finance Division for his approval, and there¬ 
after it is sent to the second assistant commissioner. 

From this point the claim may take one of two paths—if it is a claim 
in respect to which there is attached no doubt as to its legality or justness, 
it follows the ordinary course of business and is transmitted to the chief 
disbursing clerk of the department, who makes the payment. If the claim 
involves construction of law or any question that would make it doubtful, 




MUNICIPAL RESEARCH 


or if the claim belongs to a prior fiscal year, and is examined in the latter 
half of the succeeding fiscal year, the claim is sent to the Auditor for the 
Interior Department, who transmits it further in the usual manner. 

The chief disbursing officer pays some of the personal-service claims 
and some traveling expenses. To him are not referred any claims for 
annuity and trust funds, transportation claims or telegraph claims, all of 
which are sent directly to the Auditor for the Interior Department. 

Preparation of Claims 

Claims are prepared by the examiner in the form of a typewritten 
schedule, made in four copies, which shows the appropriation, the schools 
and the amounts chargeable to each. The original copy is transmitted, with 
the original invoice, to the Auditor for the Interior Department or the chief 
disbursing officer. The second copies of the invoice and the schedule are 
filed under the claim number, numerically. These constitute the office 
record of claims. The third copies of the schedule and statements are 
mailed to the claimant, and serve the purpose of informing him how the 
claim was settled. The fourth copy is retained by the examiner, as his 
personal record of the work performed by him. 

Claims for “Open Market” Purchases 

“Supply claims” include large numbers of “open market purchase claims.” 
Before an open market purchase can be made, an “authority” has to be 
obtained from the administrative section of the office. These authorities 
are ordinarily transmitted to a warehouseman with the accepted bid, and 
an abstract of all bids which were received. The warehouseman places his 
order, receives the supplies at the warehouse accompanied by an invoice, 
and certifies on the invoice the receipt of the goods. 

The warehouseman transmits the original invoice and memorandum 
to the Office of Indian Affairs, and ships the goods to the disbursing officer 
of a reservation. The original and memorandum bill of ladjng, accompa¬ 
nied by the copy of the invoice, are sent by mail to the superintendent. 
When the original invoice is received in the Office of Indian Affairs, it is 
briefed as a claim for settlement. When the authority is granted and the 
original thereof sent to the warehouseman, a copy of this authority is filed 
in the claim section under the name of the school or agency ’for which the 
supplies are purchased. This claim section copy is used to note thereon the 
settlement of the claim when the claim has been examined and passed. 

The warehouseman has instructions to transmit the original authority 
with the original claim. Frequently the authorities embrace several claims. 
For this reason it is not possible to attach and transmit the original 
authority with each claim. 

The claim section copy constitutes the office record and, by registering 
all claims, which were passed under the one authority, provides a check 
against duplication of payment. 

The method of settlement, indexing, recording and filing is the same 
for all classes of claims. 

Claims for Advertising 

The statute requires that all advertising claims shall be previously 
authorized by the head of the department. The Secretary of the Depart- 




ADMINISTRATION OF THE .INDIAN OFFICE 


ment of the Interior has delegated this power, within certain limitations, 
to the Commissioner of Indian Affairs. Each advertising claim has as a 
basis an authority which is transmitted attached to the claim. 

In the office of the Secretary there are on file advertising rates of the 
various papers. Each advertising claim is first sent to the Office of the 
Secretary, with copies of the newspapers to show actual publication. The 
office checks the advertising claims against the advertising rates. The 
claims then are returned to the Office of Indian Affairs for designation 
of appropriations and formal settlement, which is made in the usual manner 
of settling claims. 


“Building'’ Claims 

Building claims are submitted to the office from the contractors after 
being certified by the disbursing officer, superintendent or agent, and 
usually by a building inspector. The certification of the building inspector, 
however, is not required on small jobs, because a special inspector is not 
always designated, and, in such instances, the disbursing officer is required 
to certify in both capacities. These claims are compared with contracts 
on file in the claims section, and are always transmitted directly to the 
Auditor for the Interior Department. 

When the contract which was approved by the Secretary is transmitted 
to the disbursing officer by the Education Division it has attached to it 
printed instructions which the disbursing officer is required to follow when 
making his certification. 


“Public Schools” Claims 

This group of claims covers tuition of Indian pupils in public schools. 
Because of a recent decision of the Comptroller, in which he held that 
payment for tuition of Indian pupils in public schools is not legal whenever 
the Indian is entitled by State law to attend a public school without special 
charge, there are now fewer claims of this class than formerly. 

Public school claims are usually supported by a report from the teacher 
of the school showing the names of the Indian pupils and the periods of 
their attendance. An examination of these claims is made difficult because 
the Auditor for the Interior Department requires that the reports shall show 
the date of entry, the actual days of attendance, and the days absent in 
such a manner that the attendance may be mathematically verified. The 
original of the report is attached to the claim and transmitted to the 
Auditor. 

Mission boarding school claims are similar in character, and are handled 
in the same way as public school claims. 


“ Tclegraph” Claims 

The claim section verifies these claims only with regard to the appro¬ 
priations against which the telegraph claim is to be charged, and in addition 
examines it to determine whether the telegram is a due and just charge 
against the Indian Service. The number of words and the rates charged 
are not verified by the claim section. These claims are transmitted directly 
to the Auditor for settlement in order to avoid duplication of work. 




MUNICIPAL RESEARCH 


Claims for “Refunds on Land'’ 

A number of Indian reservations have been in part opened to public 
settlement, which means that Indian lands are sold, the proceeds from the 
sales being credited to the Indians. 

When entries of sale are canceled, the amount returned is accordingly 
charged to the proceeds fund. Such claims are received in the Office of 
Indian Affairs, after having received examination in the General Land 
Office. The examination which is given by the claims section only extends 
to the verification and designation of the fund to be charged, and the formal 
preparation of papers which are required in submitting the claim to the 
Auditor for the Interior Department. 


Miscellaneous Claims, “Reclamation Service” 

The Reclamation Service has been performing considerable construction 
work on irrigation projects for the Indian Service. The amounts expended 
are reimbursable monthly on vouchers to the Reclamation Service from 
funds of the Office of Indian Affairs. After these claims and vouchers 
are given proper administrative approval and examination, they are trans¬ 
mitted to the Auditor for the Interior Department for settlement. The 
settlement of these claims is made by transfer of funds. The claim section 
does not verify in detail the charges of the Reclamation Service, but with 
each statement there is a detail record supplied. 


“Geological Survey” Claims 

The Geological Survey service makes investigations on behalf of the 
Indian Service. This class of claims involves small sums, and usually is 
accompanied by vouchers approved and showing items charged for. The 
settlement of these claims is made through the Auditor for the Interior 
Department by a transfer of funds from the Office of Indian Affairs to the 
Geological Survey service. 


Claims for “Transfers of Supplies” 

When supplies are purchased for the Indian schools, it occasionally 
happens that one school receives supplies in excess of its needs. In such 
an instance, a transfer is made of the supplies to another Indian school 
or agency. This transfer is made and is accompanied by a transfer voucher 
and claim. If the transfer involves a transfer of supplies from one school 
to another, payment for which would have been made in any event from 
the same appropriation, the transfer is made by vouchers only. When, 
however, the transfer of supplies made involves a charge against a dif¬ 
ferent appropriation, the voucher is treated as a claim and requires admin¬ 
istrative examination, and must be presented to the Auditor for the Interior 
Department for settlement. The settlement consists of a transfer from one 
appropriation to another. 


Claims for “Traveling Expenses” 

Traveling expenses constitute another form of the miscellaneous claims. 
There are regulations covering traveling expenses. The regulations 
cover: 

116 




ADMINISTRATION OF THE INDIAN OFFICE 


1. General provisions: 

a. What authority required. 

b. Headquarters. 

c. Route. 

d. Actual expenses. 

e. Per diem in lieu of subsistence. 

2. Evidence of expenditures. 

3. What items constitute allowable traveling expenses: 

a. Transportation and expenses incidental thereto. 

b. Subsistence and expenses incidental thereto. 

c. Miscellaneous expenses. 

The preparation of traveling expense claims is precisely the same as that 
of any other supply claims. Their examination is made more difficult 
because the regulations are not carefully followed. 


Annuity and Trust Fund Claims 

The trust fund claims are for shares of tribal funds. The amount of the 
trust funds of the several tribes is determined from book records, and these 
funds and the amounts allowed to the individuals are calculated from 
ledgers and rolls which show the total number of Indians living and entitled 
to participate in the funds at any time. 

When a fund has been segregated by law and the amount due apportioned 
to each Indian, a book record of each Indian’s share is made. If such 
action has not been taken, then the calculation of the amount due in the 
principal fund has to be made at least annually—sometimes oftener. The 
calculation is always based on the last annuity roll showing the number of 
Indians living and individuals entitled to participate in the fund for that 
year. The claims for annuity and trust funds are handled in the same 
manner as the supply claims, with the exception that there is no contract 
against which to check the correctness of the claims. Generally the claim 
is for back annuity, which shows the amount is due and unpaid on a prior 
roll. The claim is checked against this roll. If the claim is found to be cor¬ 
rect, it is marked off on the roll to show that the claim has been settled. 
The record of the claims section is made to show that the claim is settled, 
and the index which is maintained under the Indian’s name and under the 
claim number or serial number‘is marked accordingly. 

Sioux benefit claims form a large portion of this group of claims. These 
claims may be paid in cash or partly in cash and partly in property. 


Railroad and Expense Claims 

Bills of lading support freight claims. The bills of lading are signed 
by officials who ship the supplies and by officials who receive them. Bills 
of lading indicate that the shipment was for the Government, and indicate 
points from and to which the supplies were shipped with the items and 
quantities. The examiner checks the memorandum bill of lading which 
was transmitted to the Office of Indian Affairs by the disbursing officer 




MUNICIPAL RESEARCH 


against the original bill of lading, in order to determine shortages if they 
have occurred. 

After checking the original bill of lading, all papers relating to the freight 
claim are passed to the examiner for administrative examination. This 
consists of an examination of railroad bills. In this examination the ex¬ 
aminer determines whether the items are properly classified, that proper 
deductions have been made, and that the rates are correct. The examiner 
is not required to verify computations, extensions and additions. This 
latter examination and verification has been permitted by express agree¬ 
ment with the auditor’s office in order to obviate duplication of work. 


118 



MUNICIPAL RESEARCH 


To promote the application of scientific principles to government 


Supple¬ 

ment 


Issued Monthly by the 

Oct 

Bureau of Municipal Research 19 {5 
261 Broadway, New York 


PUBLIC OPINION 
AND NATIONAL ECONOMY 

ADDRESS BEFORE THE CLEVELAND ^CHAMBER OF 
COMMERCE, OCTOBER 12, 1915 

BY MR. ROBERT FULTON CUTTING 

h 

CHAIRMAN OF THE NEW YORK 

Bureau of Municipal Research 


Subscription, 35.00 per annum. 



















PUBLIC OPINION AND NATIONAL ECONOMY 





Address Before the Cleveland Chamber of Commerce, Octo¬ 
ber 12, 1915, by Mr. Robert Fulton Cutting, Chairman 
of the New York Bureau of Municipal Research 


“Public opinion in a democracy,” said Mr. Justice Hughes, 
“wields the sceptre. Whether it be used to crucify truth and 
sanctify falsehood or for the ends of social justice—whether 
officers and agents should be successful in the administration of 
our great public trusts, whether funds and properties shall be 
effectively employed for the welfare of the people, must depend 
upon the intelligence of public opinion.” 

When Mr. Hughes uttered l^iese words he was the governor of 
the state of New York. He did not say that good government 
depended upon the nobility of public opinion or its idealism, but 
upon its intelligence, for he had learned that the archaic tools of 
state administration could not express the modern passion for 
efficiency of action. Despite the genuineness of his motives and 
his rare intellectuality, he could not prevent a substantial increase 
in administrative expense during his term of office. 

With us in the American commonwealth, public opinion is a 
veritable dictator, but as far as its influence upon the normal oper¬ 
ation of government is concerned it is still a giant in chains. It 
is without the knowledge to make its power effective. Our public 
officials are rarely chosen for specific qualifications, for expert 
knowledge, or even for proven capacity. They cannot reveal to 
us the defects in administrative methods because they cannot dis¬ 
cern those defects themselves. In not a few cases, moreover, 
methods in operation are intended to obscure rather than to illu¬ 
minate the conduct of the people’s business, and not a little in¬ 
genuity is employed to complicate the machinery of government 
and incidentally to multiply the number of place-men. Our of¬ 
ficials generally, however, take the system as they find it and some¬ 
times honestly, but hopelessly, endeavor to make it responsive to 
the expectations of the electorate. 


3 



MUNICIPAL RESEARCH 


But the day of enlightenment is dawning. Our states and muni¬ 
cipalities at least are awakening to the gravity of the situation, and 
the local civic bodies who watch legislation and administration 
have become experts in discerning the dangers or insufficiency of 
measures proposed for the ordering of community life. These 
civic bodies have learned also how to marshal public opinion and 
to enlighten it with accurate, unbiased and intelligible statements 
of fact. But however promising is this new attitude of states and 
cities, the nation itself seems to be paralyzed, and it is to this sub¬ 
ject that I wish briefly to direct your serious attention. 

It is not long ago that we were temporarily scandalized by the 
session of a billion dollar congress; then we impotently suffered 
the appropriation of a billion dollars a year. Before he left con¬ 
gress, Senator Aldrich made the statement that the application of 
sound business methods to national administration would result 
in the saving in expenditure of three hundred millions annually. 
This statement was startling, but so notorious is the waste in 
government to those who have made any inquiry into the 
matter, that this arraignment could not be denied. President 
Taft courageously essayed to clean the Augean stables. 
He appointed a commission on economy and efficiency 
and secured an appropriation of more than $200,000 for 
its operation. He chose Dr. Cleveland, one of the directors 
of the New York Bureau of Municipal Research, as the chair¬ 
man of the commission and appointed with him five men emi¬ 
nent for abilities and character. This commission immediately 
commenced the gigantic task of securing the information upon 
which to base its constructive studies. It undertook to find out 
exactly how the government of the United States was organized 
in each of its various branches; what were the conditions under 
which the personnel was appointed and required to work; what 
provisions were made for planning work to be done and financing 
the cost; what were the methods of accounting and reporting. 
It made concrete and intensive studies intended to lay the foun¬ 
dation for orders, to effect changes in method. 

The first report of the commission which was sent to con¬ 
gress presented in outline the organization of the federal govern¬ 
ment. This was followed a year later by a detailed report which 
contained the only picture ever made of the organization in each 
department and subdivision down to the smallest working unit. 


4 



PUBLIC OPINION AND NATIONAL ECONOMY 


It was a veritable encyclopedia in which anyone might discover 
how many men and of what class and salary grade and in what 
working relation they were employed were used on each battleship, 
in each military post, arsenal, navy yard, custom house, internal 
revenue office, Indian agency, government school, etc., thereby ac¬ 
counting for some 500,000 employees in the public service. This 
report was presented as of July 1, 1912. If printed it would make 
several volumes of useful facts, but this instructive manuscript has 
never been published. There are several copies of it which have 
been discreetly pigeon-holed, and although it was urged that one 
copy be placed in the library of congress, the recommendation of 
the commission was not followed. 

Not only did the commission find out how the government was 
organized, but in another report showed what work was being 
done by each unit of organization and what was the cost of 
carrying on each activity. By bringing together these two sets 
of facts the reports of the commission revealed the innumerable 
instances of overlapping, duplication and conflict of jurisdiction. 
For example, it was found that seven departments beside the 
Isthmian Canal Commission were dealing with the subject of pro¬ 
viding facilities for transportation; that four departments and 
three commissions were dealing with the subject of the regula¬ 
tion of commerce and banking; that two departments and the 
library of congress were dealing with the subjects of copyrights 
and patents; that five departments were dealing with subjects of 
agriculture, forestry, fisheries and the care of the public domain ; 
five departments with the subject of promotion and protection 
of public health; six departments with the subject of the care and 
education of the defective, dependent and delinquent. Informa¬ 
tion thus collected in a systematic manner was followed by a 
number of special reports recommending to congress changes in 
law looking toward a readjustment of organization and functions. 
As, for example, in one report it was recommended that the life 
saving service and the service which handles deep sea rescue 
work in the treasury department be transferred to the department 
of commerce and labor with a view to bringing together under 
one secretary who would be responsible for the promotion and 
protection of commerce all of the various agencies of the govern¬ 
ment which should co-operate to this end. The commission 
pointed out the wastefulness and inefficiency of having three big 




MUNICIPAL RESEARCH 


services like the lighthouse service, the life-saving service and 
the deep sea rescue (revenue cutter) service patroling the coast 
at the same time and working under two different department 
heads, one of which had no interest or responsibility for the pro¬ 
motion and protection of commerce, and it is believed that by 
bringing together these three services under one management 
practically one million dollars a year could be saved and at the 
same time efficiency largely increased. Under the system of 
bureaucratic administration which is linked up to a committee 
organization in congress, strong opposition developed to this as 
well as to many other recommendations, the advantages of which 
were just as obvious when the facts were known, and no legis¬ 
lation ensued. 

Yet the lack of accurate knowledge is not the only contribution 
to the wastefulness of government. The methods of accounting 
and reporting as discovered by the commission on economy and 
efficiency were such as to gravely misrepresent facts. Transmit¬ 
ting a report of the commission, Mr. Taft, in his message on 
March 3, 1911, makes this comment on the combined. statement 
of receipts and disbursements of the government for the fiscal 
year ending June 30, 1910—a report required by law and the only 
statement purporting to give an analysis of expenditures of the 
government as a whole: 

“This shows that the expenditures for salaries for the year 
1910 were $132,000,000 out of $950,000,000. As a matter of fact, 
the expenditures for personal services during that year were more 
nearly $400,000,000, as we have just learned by the inquiry now 
in progress under the authority given me by the last congress. 

“The only balance sheet provided to the administrator or to 
the legislator as a basis for judgment is one which leaves out of 
consideration all assets other than cash, and all liabilities other 
than warrants outstanding, as a part of the trust liabilities and 
public debt. In the liabilities no mention is made of about $70,- 
000,000 special and trust funds so held. No mention is made of 
outstanding contracts and orders issued as encumbrances on ap¬ 
propriations; of invoices which have not been vouchered; of 
vouchers which have not been audited. It is therefore impos¬ 
sible for the administrator to have in mind the maturing obliga¬ 
tions, to meet which cash must be provided. There is no means 
of determining the relation of current surplus or deficit. No 


6 




PUBLIC OPINION AND NATIONAL ECONOMY 


operation account is kept, and no statement of operation is ren¬ 
dered showing the expense incurred—the actual cost of doing 
business—on the one side, and the revenues accrued on the other. 
There are no records showing the cost of land, structures, equip¬ 
ment or the balance of stores on hand available for future use; 
there is no information coming regularly to the administrative 
head of the government or his advisers, advising them as to 
whether sinking fund requirements have been met, or of the con¬ 
dition of trust funds or special funds.” 

Think for a moment, gentlemen, of a recently chosen president 
of some stock corporation making such a report to the trustees 
of the condition of their business! Can we not readily imagine 
these trustees promptly discovering that health demanded a visit 
to some remote country with which the United States had no 
extradition treaty. Certain it is the authorities would speedily 
institute legal proceedings to determine the liability of such 
stewardship. During the past few years, indeed, no governmental 
policy has been more strenuously pursued than that of the prose¬ 
cution of officers of private corporations for conduct antagonistic 
to public interest. But the arch offender against public welfare 
is the spendthrift congress and the senile business organization 
it persists in perpetuating. 

While the two years’ work of the commission was not nearly 
sufficient to enable it to investigate all the avenues of extrava¬ 
gance and wastefulness, it nevertheless discovered in so many 
directions the evidences of inefficiency and improvidence as to 
make Senator Aldrich’s statement no very serious exaggeration. 
In the opinion of the commission the percentage of waste ran 
from io per cent to as high as 50 per cent in different offices and 
establishments. In one office, for instance, after a careful in¬ 
quiry into every process and the day’s work of every man em¬ 
ployed in it, the commission believed that $325,000 could be 
saved out of a total of $758,000. In the mail and record division 
of another office it figured that $18,000 could be saved out of a 
total of $34,000. For forty years the same process of macer¬ 
ating the fiber stock of cancelled paper money has been in use. 
Under certain modern methods of treating this, paper stock it 
could be de-inked and de-fibered with but small loss of pulp, and 
such stock when recovered can be used in the manufacture of 
new paper money at a saving as compared with the present 


7 



MUNICIPAL RESEARCH 


method of macerating, of about $100,000 per annum. The adop¬ 
tion of the window envelope for purposes of correspondence 
promised a saving of $250,000 a year. Through the use of a 
photographic process for copying where the process could be 
applied to advantage, it was thought something like 75 per cent 
of the present cost of copying could be saved. In one office re¬ 
ported on, every letter received passed through twelve different 
hands before it was finally disposed of, and was actually subject 
to thirty-nine different processes. 

The report on electric lighting of public buildings is significant 
of the inattention to administrative details in a subdivision of the 
service which is charged with the operation and maintenance of 
several hundred government buildings. Until this inquiry was 
begun no attempt had been made in this office to find out what 
was even the gross expenditures for operation as distinct from 
maintenance, or capital outlays, either for each building or for 
the whole service, and there were no means provided for knowing 
the heating, lighting, cleaning or other costs as subdivisions of 
operation. The head of the office was presumably interested in 
construction; the primary responsibility of the department was 
for the care and custody of funds; the result was that no atten¬ 
tion was given to the development of the information essential 
to the central direction and control over operative services. And 
it may be said that the condition found in this office is typical 
of the condition found in many of the operative services. These 
are merely typical illustrations of the general condition. 

Some of these matters were corrected without congressional 
action through departmental orders after the commission had 
turned on the light and the actual savings will total many times 
the cost of the commission’s work, and the influence of even the 
slight attention paid to its recommendations will be cumulative 
in results. 

The principal reform for which the commission labored and 
the one which it regarded as fundamental to all lasting benefit 
was the adoption of a budget. The United States is the only great 
nation in the world which is doing business without a budget. 
It is regarded in Europe as one of the essential prerequisites to 
parliamentary procedure, and experience seems to have demon¬ 
strated that it is the most effective instrument that has been de¬ 
vised for locating official responsibility, for promoting leadership 


8 



PUBLIC OPINION AND NATIONAL ECONOMY 


and the making of plans for the present and future welfare of 
the people. In Europe it is the prime minister who must be 
responsible for the budget. When submitted it becomes the most 
important document that goes before the parliamentary body, 
and it is on the budget that an administration must stand or fall. 
There is nothing unconstitutional in giving to the president of 
the United States the power to submit a budget to congress and 
making it his duty so to do, for while the constitution has given 
to congress the power to control the purse, it provides that the 
president shall submit to it a statement of receipts and expendi¬ 
tures and recommend to their consideration such measures as he 
shall deem necessary and expedient. The moment, however, 
when the commission on economy and efficiency presented its 
report advocating a budget, and the members of the cabinet and 
the heads of independent establishments were requested to pre¬ 
pare for the president information in a form suggested by it so 
that he could frame a budget, it signed its own death warrant. 

The appropriation bill in the coming year as passed contained 
the following rider: “That until otherwise provided by law the 
regular annual estimate of appropriations for expenses of the 
Government of the United States shall be prepared and submitted 
to congress by those charged with the duty of such proposition 
and submission, only in the form and at the time now required 
by law and in no other form and at no other time.” Congress, 
moreover, refused to make any further appropriation for the 
commission on economy and efficiency, and so starved it out of 
existence. During the short period of its existence this commis¬ 
sion had prepared or had in progress no different reports on 
different subjects under investigation. It had rendered 56 opin¬ 
ions asked for on subjects of administration. Of the no re¬ 
ports presenting results of investigations, 26 were submitted to 
congress by the president; 56 were submitted to the president and 
executive heads of departments, but were not sent to congress. 
The other 28 reports were in progress when the work of the com¬ 
mission was brought to a close. Of the 26 reports sent to con¬ 
gress, 16 contained recommendations for legislation. Legislation 
was forthcoming on only one of these reports and that with a 
qualification which in a measure defeated its end. 

It is interesting to note that during these years in which con¬ 
gress has shut the door in the face of this promising development 


9 



MUNICIPAL RESEARCH 


for reforming national administration, the City of New York has 
made significant progress in the application of science to local 
administration. The time was when Mr. Bryce in the “American 
Commonwealth” could use the City of New York to illustrate 
the defects of the democratic principle in his application to muni¬ 
cipal government, and the shameful story of the Tweed regime 
and the later plundering of the city by a predatory organization 
is still a painful memory to its citizens. It is to-day, however, 
only a memory, for during the past years the city has so success¬ 
fully pursued the introduction of sound business methods into 
administrative practice that it can to-day ofifer its machinery of 
organization and operating system as a model to the nation. In 
the actual operating cost of its various departments the City of 
New York makes the following showing in its budget tabulation. 
From 1908 onward the success of its new policy commenced to 
be apparent, and is strikingly illustrated by comparing the aver¬ 
age per cent of the annual increase for operating cost in the 
budget since 1908 with the previous five years. 

The budget increase for this particular average for 

1903-1908 was 6.63 

1908-1913 “ 5.10 

1910-1913 “ 4.41 

1913- 1914 “ 4.13 

1914- 1915 “ .04 

and this is a city increasing in population by 150,000 annually and 
more efficiently and productively administered than in any pre¬ 
vious period of its history. 

Moreover, in 1912 state legislation for the equalization of 
school teachers’ salaries in New York City was responsible for 
the arbitrary inclusion in the city budget of an additional appro¬ 
priation of $3,850,000—a continuing and increasing cost in the 
budget for each year thereafter, over which the city authorities 
have no control. 

It is surely time that the limelight was thrown upon the oper¬ 
ations of the national government. It is time that we made some 
provision for responsible executive leadership. It is time that 
public opinion was aroused to the need for a budget to be sub¬ 
mitted by the President to Congress, so that the people of these 
United States may have presented to them an accurate, dispas¬ 
sionate and lucid report upon its fiscal policies, its resources, 


10 




PUBLIC OPINION AND NATIONAL ECONOMY 


revenues and expenditures, its modes of measuring efficiency, 
testing the justifiability of appropriations. It is time that the 
executive be held responsible for simplifying, standardizing and 
unifying administration, instead of having every process, pro¬ 
cedure and detail controlled by “log rolling” committees of con¬ 
gress, the membership of which is not responsible to the people 
as a whole. There is peculiar reason in these times for the 
# application of science to government and for the conservation 
of public resources. We are fairly launched upon a costly career 
of social betterment by the direct employment of public funds 
in the effort to solve the great problems that spring out of the 
disabilities of the multitude. Some people call this socialism, but 
is it not rather the passing from an age of exaggerated to one 
of normal individualism? Are we not discovering that the fra¬ 
ternal principle of democracy must express itself in broader forms 
of co-operation and that this can best be attained through the 
agency of government? Whatever opinion may be held as to 
the wisdom of this policy, we are surely traveling along the road 
of an increasing cost of government due to an honorable senti¬ 
ment of sympathy for the less fortunate of our fellow citizens. 

No doubt the next congress will be also confronted with an 
urgent demand for war preparedness and army and navy appro¬ 
priations will swell substantially the already inflated cost of gov¬ 
ernment. Must we submit to have congress confine itself to the 
old expedient of meeting additional expenditures by increasing 
revenue? Shall politics forever prohibit statecraft from laying 
hands on the sacrosanct policy of money to burn ? After all, are 
our congressmen who can listen unmoved to such a revelation of 
administrative imbecility as that contained in the extract of Presi¬ 
dent Taft’s message the only culprits? If there be no public 
opinion demanding the reformation of national business, can we 
expect them to break loose from party obligations and contest 
single-handed with this intrenched foe? The public demand for 
the termination of this long-continued career of extravagance and 
waste must be created without before we may expect a congres¬ 
sional conversion. 

It is hard to clothe with inspiration the proposition to econo¬ 
mize and to kindle enthusiasm for a budget, but if it can be shown 
how intimately economy is related to beneficence and that simul¬ 
taneous waste and generosity spell ruin, shall we not hope to 


ir 



MUNICIPAL RESEARCH 


arouse the intelligent patriotism of our countrymen to make provi¬ 
dence an inspiring issue? No doubt we are an extravagant 
people and that the careless habits of domestic life make us in¬ 
different to the waste of national resources, but we have been 
learning some hard lessons in the past few years, both as individ¬ 
uals and as corporations. The Interstate Commerce Commission 
penalizes our railroads until their very existence compels a rigid 
economy that has resulted in diminishing the number of their . 
employees by a vast multitude. But the number of government 
employees steadily continues to increase. The National Society 
for the Promotion of Industrial Education asks for an appro¬ 
priation of $11,000,000 to encourage trade training throughout 
the country—the trade training that has made Germany so won¬ 
derfully successful in the industrial world, but it cannot get the 
money because the national payroll is too high. The utterly un¬ 
scientific distribution of labor—a problem that can only be suc¬ 
cessfully handled by the national government—can get no con¬ 
sideration because of the gigantic appropriations for palatial post 
offices in minor towns. 

How many, indeed, are the opportunities for expenditure to 
promote the health, the happiness and the prosperity of the Ameri¬ 
can people that are denied us because of the criminal waste in the 
cost' of national administration. 

The initiation of a movement to modernize the business 
methods of national administration must, come from without. 
No party government will be strong enough to do anything more 
than palliate the ravages of this disease. It is hopeless to expect 
that congress will permit the president to lay bare the conduct 
of national business, to present to the public a dispassionate, un¬ 
ambiguous analysis of the government’s fiscal policy and to illu¬ 
minate the possibilities of a constructive reorganization of office 
methods. 

But an independent, non-partisan organization equipped with 
experts of wide reputation, employed in collecting and making 
available the facts needed to organize public opinion in support of 
legislators and executive heads—an organization which has the 
power to report to the public the achievements of officers who are 
seeking to improve the service and the corresponding power 
to report to the public the possible recalcitration of the 
incorrigible spoilsman, should secure the co-operation of any 


12 



PUBLIC OPINION AND NATIONAL ECONOMY 


administration. Working along the lines of least resistance— 
that is to say, co-operating with officials instead of attacking 
them—such an organization will find in Washington many 
officeholders who will heartily welcome reform methods and 
render loyal service in putting them into operation. Such has 
been the experience of the New York Bureau of Municipal Re¬ 
search in many cities, and the brief career of Mr. Taft’s com¬ 
mission encourages us to expect the same at the Capitol. 

When official reports are called for at frequent and specific 
intervals and are presented in standardized form that will auto¬ 
matically reveal the actual facts of government, the suppressio 
veri of an administration and the snggestio falsi of its opponents 
will largely disappear.. 

Of all the great men who illuminated the pages of French his¬ 
tory at the end of the eighteenth century, there is none whose 
character and career are more inspiring than those of Turgot. 
A philosopher of the Physiocratic school, his practical mind dis¬ 
cerned the opportunity afforded by public life for expressing 
philosophic principle on the grandest scale. John Morley says of 
him that “he was one of those men to whom good government 
is a religion.” After a wonderful administration of the district 
of Limoges that illustrated the possibilities of philanthropy and 
stability in scientific government, the desperate condition of the 
national treasury induced the prime minister to try the experi¬ 
ment of making him comptroller general of France. But while 
his short administration so far restored French credit as to en¬ 
able him to place a loan with Dutch bankers at the low rate of 
four per cent, his impatience to reform the crying abuses of spe¬ 
cial privilege and the extravagance of the court were his undoing, 
and the man who might have revolutionized France without a 
reign of terror was sacrificed to the parasites that surrounded 
Marie Antoinette. 

May not the initiation of a movement such as I have outlined 
develop in congress some American Turgot, some patriot who will 
discern in fiscal reform an object worthy of the noblest ambi¬ 
tion and make it the subject of life achievement? When such a 
movement is born, and I trust it is to-day in embryo, I am sure 
it may expect the approval and co-operation of the Cleveland 
Chamber of Commerce. 


1 3 
































































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« 

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PUBLICATIONS OF BUREAU OF MUNICIPAL RESEARCH 

FINANCE Postpaid 

Handbook of Municipal Accounting (1913), 318 p. $2.12 

Municipal Administration and Accounting (Cleveland) (1909), 361 p. 2.12 

To Mayors, Comptrollers and Auditors, Scientific Accounting Methods 

(1911), 16 p.15 

New York’s City Debt: Facts and law relating to the constitutional limita¬ 
tion of New York’s indebtedness (1909), 83 p..., .25 

Memorandum of matters relating to New York City’s debt that suggest the 

necessity either for judicial ruling or for legislation (1908), 31 p.25 

Condition of New York State Sinking Funds (1915).50 

Will Taxes Increase in Greater New York? Tendency to Increase in Re¬ 
quirements (1913) 56 p. IS 

Reports 

Finance, Budget and Accounting Methods, Syracuse (1912), 8 p. xo 

Next Steps in the Development of a Budget Procedure in the City of New 

York (1915), 142 P.SO 

Financial Problems of The City of New York, 70 p. (March, 1915). 75 

GENERAL GOVERNMENT 

Organized Democracy: An Introduction to a Study of American Politics 

(Cleveland) (1913), 479 p. bound. 2.62 

American Government and Politics (Beard), 2nd ed. (1914), 788 p. bound.... 2,10 

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Government of the State of New York, Organization and Functions (January, 

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State Administration (July, 1915), 190 p... 1.00 

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The Park Question, Part I. Administrative and Accounting Methods (1908), 

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Business Methods of New York Police Department (1910), 212 p. 1.00 

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Tenement House Administration (1909), 175 p.50 

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Collecting Water Revenues (1909). 223 p.SO 


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address Bureau of Municipal Research, 261 Broadway, New York City. 

























Bureau of Municipal Research 

261 Broadway, New York 

January, 1906. Organized as “Bureau of City Betterment” 

May, 1907. Incorporated as “Bureau of Municipal Research” 


PURPOSES 

To promote efficient and economical municipal government; to promote 
the adoption of scientific methods of accounting and of reporting the 
details of municipal business, with a view to facilitating the work of 
public officials; to secure constructive publicity in matters pertaining 
to municipal problems; to collect, to classify, to analyze, to correlate, 
to interpret and to publish facts as to the administration of municipal 
government. (Articles of Incorporation.) 


TRUSTEES 

R. FULTON CUTTING, Chairman 
VICTOR MORAWETZ, Vice-Chairman 
BRADLEY MARTIN, Treasurer 
MRS. E. H. HARRIMAN 
JOSEPH W. HARRIMAN 
GEORGE B. HOPKINS 
EDWIN R. A. SELIGMAN 
ALBERT SHAW 
FRANK TUCKER 
GEORGE W. WICKERSHAM 


SAMUEL McCUNE LINDSAY, Secretary 


ADMINISTRATION 

FREDERICK A. CLEVELAND, Director 
FRED. W. LINDARS ) 

HERBERT R. SANDS V Assistant Directors 
W. B. HOLTON, Jr. ) 


TRAINING SCHOOL FOR PUBLIC SERVICE 

CHARLES A. BEARD, Supervisor 
DARRELL H. SMITH, Assistant Supervisor 








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